SINGAPORE, Oct 26, 2011 (Dow Jones) -- China will import 6 million-10 million metric tons of alumina a year by 2021 as its demand for aluminum raw material increases in line with sustained growth in the country, a senior executive at Norsk Hydro told Dow Jones Newswires Wednesday.
China will import just less than 2 million tons of alumina in 2011, but this will more than treble in the next decade as rapid urbanization boosts demand for aluminum to around 36 million tons a year, twice the current level, Simon Storesund, general manager, commercial, bauxite and alumina at Norsk Hydro, said.
Norsk Hydro expects Chinese growth to continue at a rate of 7% over the next five years and at 5% for five years afterward, he said at Metal Bulletin's Asian Bauxite and Alumina Conference in Singapore.
Latest Chinese import data showed the country imported 10,800 tons of alumina in September, up 40% from a year ago.
Storesund declined to comment on near-term market conditions or the effect of Chinese demand on alumina and aluminum prices, but said both materials are well supported around current levels due to industry cost pressures.
"Based on the general cash cost position of the industry, there should be natural support in prices around current levels. However, spot prices can--for a shorter time period--still move well outside such a price area defined based on marginal cost," he said on the sidelines of the conference.
Three-month aluminum is trading around $2,235/ton on the London Metal Exchange, down 9.5% since the start of September.
Asian market participants said many high-cost smelters have been losing money since prices dropped below $2,300/ton on Sept. 21.
Alumina is trading around $352/ton, compared with around $368/ton in early September, Metal Bulletin data showed.
"In China, we believe some refineries have a cash cost of $300-$350/ton, and those are based on imported bauxite, so in that range there will be support for prices from China," he said.
"The marginal cost for the rest of the world is $330-$390/ton, so from the rest of the world's point of view, there should be some support for the price going lower than it is now."