CBI China Co. says that consumption of aluminium in the country may rise by 20% this
year.
According to Eric Zhang, an analyst at the Shanghai-based commodities research and
forecasting company, consumption may increase from 14.02mt (million tonnes) in 2009.
However, there will still be overcapacity of the product, as the country is expected to
produce between 17.5mt to 18mt. Various steps are being taken to cut this overcapacity,
including a ban on new aluminium projects in Henan province for the next three years, as
well as ending discounts on electricity charges and doubling surcharges for highconsumption
companies.
CBI’s forecast echoes that of United Co. Rusal, the world’s largest aluminium producer,
which said recently that demand in the world’s fastest-growing major economy may grow
20% this year. Prices rose 45% in 2009 on stimulus spending and state stockpiling in China.
In mid-May, aluminium for three-month delivery on the London Metal Exchange slumped
to less than $2,000 a tonne for the first time since February as commodities tumbled on
concern that demand for raw materials will slow after European nations slashed budgets to
curb deficits. Inventories of aluminium in warehouses monitored by the Shanghai Futures
Exchange have jumped 61% this year as Chinese smelters ramped up production on
expectations that demand will improve as the global economy rebounds.