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Economy

Chinese aluminum imports set to soar

By Glenys Sim (China Daily)
Updated: 2010-10-13 14:14
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Chinese aluminum imports set to soar

 
A worker checks imported aluminum products at Qingdao Port, Shandong province. [Photo/China Daily]

SINGAPORE - Aluminum imports by China, the world's largest producer of the metal, may increase more than 25 times by 2015 as surging local demand outpaces growth in output, according to research group Harbor Intelligence.

Chinese aluminum imports set to soar

It says imports may total 198,000 tons next year and rise to 5.04 million in 2015. Chinese demand may increase 12.9 percent from 2011 to 2015, outstripping annual output growth of 9.8 percent.

Increased purchases by the world's largest user of metals may support an advance in global prices, and Harbor estimates that China's aluminum prices may gain more than 10 percent next year as an energy-saving program forces output cuts.

"Supplies are expected to tighten in the next few years as China reduces output, and demand increases for a metal that has few substitutes," said Li Ye, an analyst at Minmetals Star Futures Co. Three-month aluminum traded at $2,390 a metric ton on the London Metal Exchange on Tuesday, having gained 23 percent over the past year.

Harbor's report said the cash contract on the Shanghai Futures Exchange may average $2,706 a metric ton, that's about 18,034 yuan, in 2011. Cash aluminum in Shanghai, which has averaged $2,430 a ton this year, traded at around $2,408 on Tuesday.

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China produced 9.7 million tons of primary aluminum in the first seven months of 2010, according to Beijing Antaike Information Development Co. That's about 46 percent more than the same period last year.

Customs data shows that imports totaled 169,149 tons in the first eight months of 2010.

This year, the country started to control production at energy-intensive plants as central government aims to meet an energy-saving target in its 11th Five-Year Plan.

Power usage by aluminum producers accounts for 6 percent of the country's total, according to Shanghai Metals Market, and for as much as half of the cost of producing aluminum. The energy-reduction program saw the loss of more than 500,000 annualized tons of aluminum during August in Sichuan, Henan, Shaanxi, Guizhou and Shandong provinces. Henan, the largest aluminum-producing region, will cut output by almost 20 percent in the fourth quarter and reduce production by 180,000 tons, the Henan Non-ferrous Metals Industry Association said on Saturday.

Aluminum Corp of China Ltd, the nation's biggest producer, plans to shut down 330,000 tons of obsolete smelting capacity by 2011, equivalent to about 8 percent of its total, Chairman Xiong Weiping said in August. Xiong added that overcapacity in the industry, which is estimated at as much as 30 percent, "will disappear" in the next three years as demand increases.

 

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