China Aluminum Industry Chain Analysis, 2010-2011

Background

China's Central Government has been making great efforts to adjust economic structure in 2010, while aluminum industry, one of China's major targets of industrial structural adjustment, faced great crisis. Aluminum producers accelerated the pace of commissioning new capacity after strong rebounds in aluminum markets in 2009. China's aluminum output increased rapidly in 1H 2010, and a number of large-scale newly-added projects were also under construction, allowing aluminum spot inventories to set new highs continuously, and both aluminum overcapacity and strengthening US dollar index exerted heavy pressure on aluminum prices. In 2H 2010, Chinese Central Government strengthened efforts to conserve energy and cut emissions, with aluminum industry again becoming the market focus. Aluminum producers have faced growing pressure from production cuts since August 2010, and they had to delay the commissioning of a portion of newly-added projects, helping slightly ease the excess supply of aluminum, and aluminum prices also showed positive signals following the accelerated pace of RMB appreciation. The strong demand from end-users remained the driving force for aluminum prices in 2010, and both strong domestic demand in China and expanding application scope of aluminum have laid solid foundation for the future development of China's aluminum industry.

What is Our Focus

- How will China's aluminum industry complete the industrial structure adjustment in the process of economic recovery?
- How will China's aluminum consumption remain strong in the future?
- What are opportunities and challenges for the development of China's aluminum industry after entering the era of the 12th Five-Year Plan?

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