Taiwan's top aluminium products mill to raise output

Taiwan's biggest flat-rolled aluminium products mill C.S. Aluminium plans to raise production next year due to increased orders mainly from Asia in the second half of this year.

"We are cautiously optimistic for next year," a top executive who asked not to named, told Reuters. "We hope our output next year will be above this year's 120,000 tonnes."

He said the mill was operating nearly at full speed again after falling to 40 percent in the first quarter and 70 percent in the second quarter as a result of the financial crisis.

C.S. Aluminium, also the biggest end-user of the primary metal in Taiwan, is capable of making 180,000 tonnes of flat-rolled products such as sheets, coils and foils for food packaging, transportation and the machinery sector annually.

"The market was not good in the first quarter. Demand started picking up from the second quarter," he said.

Some 40 percent of the company's products are exported.

Orders from buyers in Asia had increased but those from the U.S. and Europe remained low, he added. The bulk of those orders were under spot contracts with shorter delivery requirements.

The financial crisis has prompted buyers to hold low stocks of product and place ad hoc orders with the Taiwanese mill.

"We used to do mostly term orders. Now, such orders have fallen a lot," the executive said.

C.S. Aluminium, a subsidiary of Taiwan's China Steel (2002.TW), expects global aluminium supply and demand to be in balance next year or a marginal surplus if Chinese smelters restart all their idle capacity and fire up new capacity.

Smelters in China, the world's top aluminium producer, could increase production if domestic aluminium prices stay at 14,000-15,000 yuan a tonne, the executive said.

Oil prices CLc1 LCOc1 remain a key factor for global prices of the energy-intensive metal next year, he said.

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