China Backs Long-term Iron Ore Pricing; Urges Fairness

SINGAPORE, Mar. 24 -- Aluminum demand in China, the biggest consumer, will expand by at least 20 percent this year as the economy extends a recovery from the worst global recession since World War II, said Aluminum Corp. of China Ltd.
Demand for the metal will be about 17 million metric tons in 2010, said Liu Xiangmin, vice president of the Beijing-based company known as Chalco. &quot;We are bullish about China's aluminum demand,&quot; he said at a mining conference in Singapore.
Alcoa Inc., the largest U.S. aluminum maker, forecast on Jan. 11 that global demand for the metal will increase 10 percent this year, led by China. Aluminum prices have jumped 54 percent in the past 12 months in London as stimulus spending by the Chinese government spurred demand.
Chinese demand will be driven by increased usage from the transport industry as more high-speed rail networks are built, Liu said. &quot;The carriages of these high speed trains are now made completely of aluminum,&quot; he said.
Chalco, China's largest maker of aluminum, fell 0.4 percent to close at HK$8.03 in Hong Kong trading. Three-month delivery aluminum on the London Metal Exchange fell 0.7 percent to $2,240 a ton at 4:16 p.m. Singapore time.
China's output of the light metal may reach 17.5 million tons, leaving the country with a surplus of 500,000 tons, which is the &quot;normal&quot; excess for inventories, said Liu.
Shanghai Inventories 
Inventories monitored by the Shanghai Futures Exchange stood at 394,328 tons last week, the highest level since at least 2003.
State-owned parent Aluminum Corp of China, known as Chinalco, is looking to expand its aluminum, copper and rare metals businesses, Liu also said.
&quot;Chinalco is very willing to be part of overseas resources projects,&quot; Liu said when asked about investments in Mongolia, declining to elaborate further.
Chinalco is in talks with Rio Tinto Group about the Oyu Tolgoi copper and gold project in Mongolia, and bauxite and alumina refining in Australia, the Sydney Morning Herald reported. Both companies last week agreed to jointly develop the Simandou iron ore project in Guinea.
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