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China 2010 Aluminium Capacity Seen Growing 10-15 pct
May 10,2010 09:01CST
industry news

SHANGHAI, May 10 -- China's aluminium output this year may climb to more than 15 million tonnes and its smelting capacity grow between 2 to 3 million tonnes, an industry group official said on Friday.

China's aluminium smelting capacity increase this year would be against 20.6 million tonnes in 2009, Wen Xianjun, vice chairman of China Nonferrous Metals Industry Association, told reporters on the sidelines of a conference.

"The production is still growing fast and pressure is mounting from excessive smelting capacity," Wen told the conference. "Capacity is increasing too fast, but investment is still enthusiastic."

China's aluminium output was 13 million tonnes in 2009.

Wen said that investment in new aluminium projects jumped more than 100 percent from a year earlier to 6.29 billion yuan ($921.4 million).

Wen said the aluminium industry was also facing pressure from higher energy costs as power tariffs were expected to rise this year.

"The direct sales scheme will be very difficult to carry on," said Wen, referring to a pilot project launched last year to allow aluminium smelters to buy electricity directly from power plants, aimed at lowering costs for smelters and boosting demand for power plants.

"I'm not pessimistic about aluminium prices this year, but smelters are probably making money due to higher cost," Wen said, declining to give a price forecast.

The pilot project stalled this year as power plants became less willing to sell electricity to aluminium users at discounts when demand recovered from the lows seen during the financial crisis last year, the China Electricity Council said recently.


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