Oversupply of aluminium industry is hard to improve

According to International Aluminium Forum, increase of aluminium has been slowed since entering 2008, especially in H2 when aluminium output was about to suspend; while consumption rate of primary aluminium was reducing faster.

There are three reasons for substantial fall of primary aluminium prices: first affected by financial crisis which drives the capital away from the metal market; second, prediction of reducing demand; third, strength of the dollar portends well. The used bull market undermines the structure of aluminium industry in China.

Aluminium enterprises should examining themselves over this crisis as it is blinded to lay survive and development totally on expansion of capacity.

Industrialization of urbanization of China has a long way to go, which mean, the prospect of demand on aluminium and other nonferrous metals is promising. This crisis will contribute to adjust and perfection of the inner structure of aluminium industry.

Cost of aluminium production in 2009, as predicted, would reduce while increase rate of demand would further be slowed; however, the output, constrained by weak demand, would be hard to increase. Large scale spare of aluminium capacity would continue to limit development of aluminium industry.

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