Metals News
Sanmenxia Aluminum to Double Recycling Capacity, Executive Says
industry news
Dec 7,2009

SHANGHAI, Nov. 3 -- Sanmenxia Tianyuan Aluminum Co., a Chinese producer of the metal, will double its recycling capacity of the lightweight material to meet demand from carmakers, an executive said.

    The company will expand capacity of so-called secondary aluminum to 100,000 metric tons next year from 50,000 tons, Xiao Chongxin, a director and senior engineer at Sanmenxia, told reporters in Shanghai today. China is the world's largest producer of aluminum, which is used in cars. Secondary aluminum is made from scrap metal.

    Passenger car sales passed 1 million units for the first time in September in China, which is on track to overtake the U.S. as the world's largest auto market this year. The economy expanded at 8.9 percent in the third quarter, the fastest pace in a year, as stimulus spending and record lending growth helped the nation lead the world out of recession.

    "We expect Chinese aluminum prices to stabilize with upside potential next year" at about 16,500 yuan ($2,417) a ton as the economy further recovers, Xiao said at a conference.

    Aluminum on the Shanghai Futures Exchange has jumped 32 percent this year and was at 15,185 yuan a ton by 1:33 p.m. local time. Sanmenxia shares in Hong Kong, which have gained 21 percent this year, plunged 11.2 percent to 17.4 cents.

    Demand for secondary aluminum is "closely correlated to the wax and wane of the car industry," said Liang Zhimin, a manager at Shanghai Sigma Metals Inc. the country's largest maker of aluminum from scrap. China's use of aluminum per car has gained to 75 kilograms from 28 kilograms in the 1980s due to efforts to reduce weight and improve comfort, Liang said.

    (Source: Bloomberg)

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