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Aluminium Output Still not Enough
China is expected to see its production of aluminium hit a record high this year, but the country still needs to import a lot to satisfy ever increasing consumption.
With an additional production capacity of 550,000 tons brought into operation this year, China's output of aluminium is estimated to reach 3.1 million tons by year end, increasing 10 per cent from last year, according to Dong Chunming, vice-general director of the Antike Information Development Co Ltd, the predecessor of which was the Information Centre of China's National Non-ferrous Metals Industry.
As China continues with its proactive fiscal policy this year, the demand for aluminium will rise by 11-13 per cent, reaching a possible 3.75 million tons, according to Dong.
He attributed the robust aluminium consumption to massive infrastructure construction, including the upgrading of power grids in urban and rural areas and the construction of hydropower stations.
To bridge the gap between demand and supply, China is expected to import 650,000 tons of aluminium this year, almost one-fifth of the total that will be used, Dong said.
China, the third largest aluminium producer after the United States and Russia, imported 688,000 tons of aluminium last year, more than double that of 1999.
Besides the mounting demand, increasing imports are also the result of lower prices on the international market, which means that it is cheaper to purchase aluminium abroad than it is to produce it at home.
Dong added that China's policy of supporting border trade is also spurring the increase in imports.
According to Dong, China cut the border tariff on aluminium by half last year, which stimulated the export of aluminum from Russia.
Russian aluminium accounted for some 50 per cent of the total imports last year.
"Although importing from overseas does ease the aluminium shortage, it is not beneficial to the long-term development of domestic companies," said Chen Kexin, a senior official with the China Metal Information Centre.
Chen said that to withstand the intensified competition after China's entry into the WTO, domestic aluminium producers should hone their competitive edges by allowing for technological innovation and adopting better management techniques to cut production costs.
With the notable growth in aluminium production this year, China is also expected to import more alumina, the raw material of aluminium, Dong noted.
The amount of alumina to be extracted this year in China is expected to amount to 4.5 million tons, 2.1 million tons less than the demand.
Last year, China imported 1.77 million tons of alumina.
source: China Daily
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