China¡¯s aluminium capacity to exceed 30-Mln tpy on falling cash costs

China’s aluminium capacity would exceed 30 million tpy by the year’s end and reach over 34 million tpy in 2014, helped by declines in cash costs, Shanghai Metals Market said at its China Metal Summit.

The country would have a capacity of 30.3 million tpy to produce the lightweight metal by the end of this year, with actual output estimated at 24.9 million tonnes, SMM’s aluminium analyst Zhang Chenguang said at the summit in Shanghai on Wednesday.

China’s aluminium capacity would grow by another 12.8% year-on-year to 34.2 million tpy next year and production by 13.8% to 28.3 million tonnes in 2014, he said.

The growth was helped by sharp declines in cash costs as most Chinese aluminium producers use cash basis accounting nowadays.

Average cash loss ratio has dwindled to 17% at present, from as high as 40% last year, Zhang told delegates at the summit.

He attributed causes of the declines to the exit of some high-cost capacity as well as the commissioning of low-cost capacity in China’s northwest region.

In addition, falling domestic coal prices considerably saved costs for producers with self-run power plants.

China had 27.65 million tpy of aluminium capacity at the end of 2012, according to a statement by the ministry of industry and information technology (MIIT) in February.

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