SHANGHAI, Jan. 25 -- China's aluminum output may gain to more than 17 million metric tons this year, outpacing a rise in demand, said Wan Ling, an analyst at CRU International Ltd.

Consumption may gain 15 percent to 16 million metric tons, Wan said at a conference in Shanghai today. Still, even with a surplus "aluminum prices will be supported by robust demand and rising power prices," Wan said, adding that production in 2009 totaled 13.4 million tons. China is the world's largest metals consumer.

The lightweight metal added 45 percent on the London Metal Exchange last year, the most since 1994, even as inventories almost doubled. Demand for aluminum dropped 18 percent in 2009 outside China, according to London-based CRU.

China is also building 3 million tons of aluminum capacity, some of which is slated to go into production this year and in 2011, Wan said. Aluminum smelters in China faced higher production costs from November after the government announced an increase in power prices, Wan said Nov. 19.

Power accounts for about 40 percent of the cost of aluminum smelting and the electricity consumed by China's aluminum industry exceeds 6 percent of the country's total power consumption, according to Barclays Capital.

London Metal Exchange aluminum stockpiles reached a record 4.64 million tons on Jan. 21. Stockpiles monitored by the Shanghai Futures Exchange jumped 6.8 percent this week to 20,944 tons, the highest since at least 2003, Bloomberg data show.

Aluminum for delivery in three months in London fell 0.4 percent yesterday to $2,231 a ton.