Surplus of China¡¯s aluminium industry will last for one year

UBS declared in the aluminium industry report of December 9 that surplus of China¡¯s aluminium industry would last for a year, overcapacity of aluminium industry in China and in the world resulted from oversupply and weak demand.

According to UBS, the trend will last till the end of 2009 when the aluminium price will be 75 cents a pound and alumina 225 cents a ton, a five year low, as predicted.

China¡¯s market structure lead to lasting surplus

Even before the global setback, oversupply of aluminium and alumina has already exists, caused by overcapacity and the policy to reduce export. Substantial output cut is considered to the only way out against the present demand weak.

Output cut can not prevent losing in 2009

According to the present price and UBS who indicated that price of 2009 would be lower than production costs of most producers, output cut was long overdue. 

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