DJ Norsk Hydro Says China Aluminum Imports Unsustainable

The current high level of primary aluminum imports into China is unsustainable because rising capacity there will push down domestic prices and make local material cheaper, Norway's Norsk Hydro ASA (NHY.OS) said Wednesday.

China, the world's largest aluminum producer, has followed other major producers in curtailing output due to slumping demand and weak prices, but a recovery in prices is expected to see some of this restart, the company noted.

At the same time, newly commissioned capacity is expected to come on stream in China during the next several months, increasing downward pressure on Shanghai aluminum prices.

"As a result, the higher level of imports of primary aluminum into the Chinese market is not expected to be sustainable," the company added.
 
Global primary aluminum consumption, excluding China, could decline by 15% to 20% in 2009 from a consumption level of 25 million metric tons in 2008, Norsk Hydro said. "Supported by economic stimulus and recovery packages, Chinese consumption of primary aluminum in 2009 is expected to be in line with 2008 levels of 12.5 million tons," it added.

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