SHANGHAI, Feb. 21 (SMM) -- Aluminum semis processing in China will experience rapid growth over the next ten years, along with the country’s urbanization and economic transformation. Based on past experiences, changes in economic development mode will drive changes in metal consumption. Manufacturing upgrades, consumption upgrading, and emerging industries prompted by China’s 12th Five-Year Plan will become the three major driving forces behind structural adjustments in the consumption of aluminum semis. In this context, SMM predicts compounded annual growth rate for China’s aluminum semis consumption will be approximately 10% over the next ten years. Growth of aluminum semis used for construction will slow, while aluminum semis consumption in transportation, durable goods, and emerging industries will experience rapid growth, with the proportion of consumption in these industries expected to increase from the current 40% to over 60% and gradually moving closer to European and US rates. In addition, demand for aluminum profiles used for high-speed rail trains and automobiles, as well as electronic foils, will experience the fastest growth, with compounded annual growth rates expected to reach 15%-20% between 2010 and 2015. Growth in demand will determine the medium-to-long-term growth for aluminum semis producers, while barriers to entry will determine profitability of producers. In this context, leading enterprises will enjoy higher profits faster by overcoming barriers in technologies and distribution channels.
SMM believes emerging industries will become the greatest potential market for aluminum semis in the future, but construction and transportation will continue to lead China’s aluminum consumption markets during the current 12th Five-Year Plan period and into the 13th Five-Year Plan period.
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