BEIJING, Oct. 29 -- China's aluminum production may gain 9 percent to 14.5 million metric tons in 2010 as capacity idled because of the financial crisis is restarted after prices rebounded, said an executive with River Edge Nonferrous.

    "Chinese aluminum production has come roaring back and is likely to reach 13.3 million tons this year," Peter Deneen, an industry consultant with New Jersey-based River Edge, said at a conference today. Output last year was 13.2 million tons, the China Nonferrous Metals Industry Association has said.

    Aluminum output in China, the world's biggest consumer and producer, has gained after a 4 trillion yuan ($586 billion) government stimulus plan boosted demand and prices. Smelters had reduced output of the metal used in aircraft and cars after aluminum prices plunged 36 percent last year.

    Aluminum production this year "might be flat to even higher than last year's 13.2 million tons, because smelters have been bringing back idled capacity since the second quarter at a faster speed than the market had anticipated," Wang Feihong, analyst at a unit of China Minmetals Corp., said from Beijing today. Still, "there are different opinions out there."

    The effect of the financial crisis will likely cut output of primary aluminum to 12.75 million tons this year, according to slides prepared for the conference by Huang Zichao, president at the consultancy Guangzhou KCTH Trading Co.

    Output Gains

    China posted an 8 percent increase in output of the metal in September compared with the previous month to 1.2 million tons, according to the statistics bureau. Aluminum Corp. of China Ltd., the nation's biggest producer of the metal, yesterday posted its first profit in four quarters on increased demand and prices.

    As with aluminum production, China's alumina output will be flat at 24 million tons this year before rising to 28 million tons next year, leaving little scope for alumina imports, said Deneen, who was attending a conference in Hong Kong. Two tons of alumina is needed to produce one ton of aluminum.

    China will rely on bauxite to feed its growing alumina production capacity, which is forecast to rise 11.1 percent to 40 million tons in 2010, said Deneen. Bauxite is the raw ingredient that is refined to make alumina.

    "China has achieved self-sufficiency in aluminum, and effectively in alumina, but has been unable to do so in bauxite," Paul Messenger, chief executive officer at Cape Alumina Ltd., said at the conference.

    Aluminum on the London Metal Exchange has gained 28 percent this year and declined 1 percent to $1,965 a ton by 5:17 p.m. in Hong Kong.

    (Source: Bloomberg)