Aluminium encounters the most serous overcapacity

A half alumina companies are losing money, and Shandong alone has cut 6 million tons alumina, said a insider.

Real economy is sliding greatly, worsened by the most series overcapacity of aluminium for these ten years.

Capacity cut is the only way out. Shandong, which produce 1/3 of the country¡¯s alumina, has cut 6 million tons, besides, the country have to cut 3 million tons electrolytic aluminium in order to reach coordination of supply and demand.

If the trend lasts, insider say, ¡°many alumina companies will not be able to handle it in three to five months, when electrolytic aluminium companies will also die of fund-strand break¡±

Electrolytic aluminium price at Shanghai Futures Exchang has been falling from the peak 18715 yuan/ton since August to the low of 13800 yuan/ton open price of October 13 to 17. So was the case of spot price in Shanghai: fell from 17890 yuan/ton during August 18 to 22 to the low of 13828 yuan/ton during October 13 to 17.

Another reason is the reduced market demand on electrolytic aluminium.

Therefore, capacity cut is the only way to save the market. Chalco started the trend on October 23 to cut output of electrolytic aluminium by about 720000 ton/year, about 18% of the company¡¯s total capability. Many companies followed up later, as cut at Chalco was an important sign for the industry.

The overcapacity has been of the most series condition for 10 years; while demand growth of next year can hardly surpass that of this year, about 9% only.

Copyright and Exemption Declaration :¢ÙAll articles, pictures and videos that are marked with "China Aluminum Network" on this website are copyright and belong to China Aluminium Network (www.alu.com.cn). When transshipment, any media, website or individual must list the source from "China Aluminium Network (www.alu.com.cn)". We seek legal actions against anyone that disobey this. ¢ÚArticles that marked as copy from others are for transferring more information to readers, do not represent or endorse their opinions or accuracy and reliability. When other media, website or individuals copy from our website, must keep the source. Anyone that changes the articles' sources will hold the responsibilities for copyright and law problems. We also seek legal actions against anyone that disobey this. ¢ÛIf any articles copied by our website concern the copyright and other problems, please contact us within one week.