China's Aluminum Exports may Drop to Lowest Level in 2008

China's aluminum exports may fall to its lowest level next year since 2002, as a result of strong domestic demand from auto or plane manufacturers and rising taxes on aluminum exports.

China's net exports of primary aluminum may drop 17.65% to 70,000 metric tons from an estimated 85,500 tons, while China exported 548,000 tons of aluminum last year and 625,000 tons in 2005 respectively, according to Bloomberg News survey and CRU International Ltd, a consultancy company.

The slump in aluminum exports may mark China, the largest producer of lightweight metal in the world, to become a net importer of aluminum as early as 2009, which may lead to rising global aluminum prices, said Wan Ling at CRU.

Global aluminum prices lost over 10% this year as supply surpasses demand. The surplus amounted to 320,000 tons by the end of September and the figure stood at 56,900 tons in September alone, said the World Bureau of Metal Statistics. The benchmark LME contract only rose US$6 to close at US$2,510 per ton yesterday.

Meanwhile, China's surplus will decline to 160,000 tons from an estimated 340,000 tons. The surplus will continue to shrink next year, resulting from a slowing production and surging demand, according to Beijing Antaike Information Development Co.

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