SHANGHAI, Nov 03, 2011 (Dow Jones) -- China will remain the world's largest scrap aluminum importer for at least the next five years, as robust demand from the automotive sector outstrips domestic aluminum supply, an executive at a unit of Aluminum Corp. of China, or Chinalco, said Thursday.
It will likely take at least another decade in China for the "recycling cycle" to reach the stage at which the country will be self-sufficient in scrap, given that industrial usage of primary aluminum only started in the mid-1990s and it takes around 30 years for the metal to reach the scrap heap, Liu Bo, vice general manager at Chinalco's Nela Import and Export Corp., said during an industry conference.
China's demand for scrap aluminum totaled 3.9 million metric tons last year, 27% of it from the domestic market, said Liu, who added that he expects that average monthly imports will hold steady at 210,000 tons for the rest of the year.
An accelerating appreciation of the yuan would help boost demand for scrap aluminum from the U.S. and Europe, he said.
Meanwhile, domestic supply is rising, Liu said, tipping scrap output to reach 4.5 million tons a year by 2014 from a record high of 3.65 million tons last year.
Chinalco has two scrap aluminum units in the cities of Nanhai and Qingdao with a combined annual capacity of 180,000 tons, Liu said.