Friday, November 6, 2009

Chinese aluminum output may increase by 9pct in 2010

Bloomberg reported that China's aluminum production may gain 9% to 14.5 million tonnes in 2010 as capacity idled because of the financial crisis is restarted after prices rebounded.

Mr Peter Deneen an industry consultant with New Jersey based River Edge said that "Chinese aluminum production has come roaring back and is likely to reach 13.3 million tonnes 2009."

The China Nonferrous Metals Industry Association has said that output of 2008 was 13.2 million tonnes.

Aluminum output in China, the world's biggest consumer and producer has gained after CNY 4 trillion government stimulus plan boosted demand and prices. Smelters had reduced output of the metal used in aircraft and cars after aluminum prices plunged 36% in 2008.

Mr Wang Feihong analyst at a unit of China Minmetals Corporation said that aluminum production in 2009 might be flat to even higher than 2008's 13.2 million tonnes because smelters have been bringing back idled capacity since the Q2 at a faster speed than the market had anticipated.

Mr Huang Zichao president at the consultancy Guangzhou KCTH Trading Company said that the effect of the financial crisis will likely cut output of primary aluminum to 12.75 million tonnes 2009.

According to the statistics bureau, China posted an 8% increase in output of the metal in September compared with the previous month to 1.2 million tonnes. Aluminum Corporation of China Limited posted its first profit in Q4 on increased demand and prices.

Mr Deneen who was attending a conference in Hong Kong said that as with aluminum production, China's alumina output will be flat at 24 million tonnes 2009 before rising to 28 million tonnes 2010 leaving little scope for alumina imports. 2 tonnes of alumina is needed to produce one ton of aluminum. He said that China will rely on bauxite to feed its growing alumina production capacity, which is forecast to rise 11.1% to 40 million tonnes in 2010.

Mr Paul Messenger CEO at Cape Alumina Limited said that "China has achieved self sufficiency in aluminum and effectively in alumina but has been unable to do so in bauxite."

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