China plans to boost value-added applications in aluminium by 20% in coming years

China, the top producer and consumer of base metals, especially aluminium aims to expand aluminium demand by 18 per cent in the next three years.  Being one of the top exporters of aluminium, China has been facing a number of allegations regarding unethical export to U.S. and Europe.  According to an industry group, as a changing strategy it plans to boost high-end application in transportation and construction industry.

China Nonferrous Industry Association says that the country plans to increase consumption by 6 million tons. Beijing Antaike Information Development Co., a researcher affiliated with the CNIA confirms that China consumed 32.5 million tons of aluminium last year.

In the month of June, China’s State Council issued guidelines towards revamping of the base-metals industry. Such guidelines include putting limitation on new capacity, encouraging mergers and acquisitions, offering tax breaks and building stockpiles. The country is planning to shift toward a consumption-led economy from one that was driven by investment. The council’s policy is designed put restrictions on random export and to help the industry cope with a slowdown in demand growth.  The association sticks to their plan of restricting new expansions in the aluminium and copper industries and to start accumulating commercial reserves for domestic use over and above the existing company inventories. It confirms that this stockpiling will start with aluminium and expand to other major base metals.  No more details have been divulged in this regard. It is to  be noted here that the State Reserve Bureau also stores metals to manage supply in the domestic market.

China Nonferrous Industry Association plans to focus on the transport, construction, commercial aerospace and marine sector to boost consumption in aluminium.  The country will focus on technological innovation to boost the supply of high-end products in these sectors so that they can manufacture those applications domestically and cut down on the import reliance.

Along with the recent drop in domestic aluminium inventory and export from China, these strategic moves are expected to bring about positive changes in the China economy.

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