China's aluminum import demand to surge: report

Updated: 2010-10-12 17:45
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Aluminum imports by China, the world's largest producer, may increase more than 25 times by 2015 as surging local demand outpaces growth in output, Bloomberg repoted on Oct 12.

China's demand may gain 12.9 percent a year from 2011 to 2015, outpacing annual output growth of 9.8 percent, Bloomberg said, citing the report from research group Harbor Intelligence, which has analyzed the global aluminum market for more than 20 years.

Imports of the metal used in autos may total 198,000 tons next year and 5.04 million tons in 2015, the Texas-based group said in an e-mailed report on Oct 12.

Increased purchases by the world's largest metals user may support an advance in global prices, benefiting companies such as Alcoa Inc, the biggest US producer. China's aluminum prices may gain more than 10 percent next year as an energy-saving drive forces output cuts, Harbor's report also said.

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Three-month aluminum traded at $2,390 a ton on the London Metal Exchange on Oct 12, having gained 23 percent over the past year. The cash contract on the Shanghai Futures Exchange may average $2,706 a metric ton, or about 18,034 yuan, in 2011, Harbor's report said. Cash aluminum in Shanghai has averaged $2,430 a ton this year, and traded at about $2,408 on Oct 12.

"China will increasingly import primary aluminum," the report said. "Although there has been talk that the output cuts are being replaced with new, more efficient capacity, our view is that conditions are no longer in place for China's aluminum output to over-deliver as it did in the past."

Aluminum Corp of China Ltd, the nation's biggest producer, plans to shut 330,000 tons of obsolete smelting capacity by 2011, equivalent to about 8 percent of its total, Chairman Xiong Weiping said in August. Overcapacity in the industry, estimated at as much as 30 percent, "will disappear" in the next three years as demand increases, Xiong said.