Metals News
China Aluminum Facilities Shift to Western Region for Cost Advantages
smm insight
Jul 26,2010

SHANGHAI, July 26 (SMM) -- China's aluminum industry is currently experiencing unprecedented difficulties.  The aluminum industry in Henan province, China's largest regional supplier, has experienced losses since  May, with difficulties only growing since the 2008 financial crisis.  Some experts believe the westward migration of China's aluminum industry is becoming a trend, with additional transfers of facilities in progress. 

SMM believes that from a long-term development perspective, production costs will become a major factor affecting the location of China's aluminum industry.  The average production cost for aluminum produced in China is now higher than the global average, due mainly to higher electricity prices in China.  The level of economic development in China's western region is low, but the  region is rich in raw materials, hydro electric,  wind, and solar power, as well as  coal, and also contains large areas for development. In this context, China's aluminum industry will transfer significant assets to this region, especially to areas with lower electricity prices.


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