China likes aluminum
Commodities - OCTOBER 6, 2016

China likes aluminum

by Jody Barhanovich

China, the world’s top consumer of base metals, aims to expand aluminum demand by 18 percent in the next three years by boosting use of high-end products in transportation and construction, according to the American Journal of Transportation.

The nation is seeking to raise consumption by 6 million metric tons, the China Nonferrous Industry Association said in a plan posted on its WeChat platform. The country used 32.5 million tons during 2015, according to Beijing Antaike Information Development Co.

China’s State Council in June issued guidelines for a revamp of the base metals industry, such as limiting new capacity, encouraging mergers and acquisitions, offering tax breaks, and building stockpiles. The policy is designed to help the industry cope with a slowdown in demand growth as the country shifts toward a consumption-led economy from one driven by investment.

Prices of the metal used to make everything from window frames to aircraft have climbed more than 20 percent from a low in November 2015 on the Shanghai Futures Exchange.China will develop consumption of aluminum products in vehicles, construction, commercial aircraft and ships, according to the association’s plan. More copper will be used in infrastructure and new-energy vehicles, it says. The country will focus on technological innovation to boost the supply of high-end products and cut reliance on imports, it says.

China’s aluminum smelters pledged in December 2015 to halt new mills, keep idled capacity closed and boost “production flexibility” after prices slumped to the lowest level in six years, according to China Nonferrous Metals Industry Association.

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