One-Third of China Aluminum Output ¡®Affected¡¯ by Curbs

Nov. 11 (Bloomberg) -- One-third of China’s aluminum production capacity has been “affected” by energy-saving power curbs and output this year may fall short of forecasts, said an industry executive today.

Chinese aluminum output may be less than a forecast 17 million metric tons as smelters either temporarily reduce production or shut facilities completely, Xiao Chongxin, executive general manager of Sanmenxia Tianyuan Aluminum Co. in Henan province. Production last year was 13 million tons, govenrment data shows. Aluminum is used in cars, cans and airplanes.

Aluminum prices in China, the world’s largest producer and consumer, have gained 17 percent in the second half as smelters in Henan, Guizhou, Qinghai provinces and Guangxi region have suspended capacity as local governments try to meet Beijing’s energy-conservation goals set for 2010.

“It’s likely that the country’s total production may fall month on month in the fourth quarter,” Xiao said in an interview at a conference in Shanghai.

Henan province, the largest aluminum-producing region, may suspend about 1 million tons of production capacity in the fourth quarter in an effort to meet Beijing’s energy-saving targets, Zhang Fengkui, head of the nonferrous metals office at the Ministry of Industry and Information Technology, said Oct. 26.

Aluminum output in January to October gained 28 percent to 13.2 million tons, the statistics bureau said today.

Output Target

China aims to restrict alumina output capacity to within 41 million tons by the end of 2015, and aluminum production to 22 million tons, Xiao said, citing the government’s 12th “five- year plan.” Alumina, a white powder refined from bauxite, is smelted to produce aluminum.

The country also aims to double the output of recycled aluminum out of environmental concerns to 5.8 million tons to 6 million tons from around 3.1 million tons this year, said Xiao.

“The growth rate of recycled aluminum will accelerate, but that of primary aluminum will slow down a bit,” he said.

Aluminum output may gain 28 percent to 17.5 million tons this year, according to Beijing Antaike Information Development Co. Consumption is likely to total 16.8 million tons this year, up 22 percent from 2009, according to Beijing Antaike.

--Helen Sun. Editors: Richard Dobson, Jake Lloyd-Smith.

To contact the Bloomberg News staff on this story: Helen Sun in Shanghai at hsun30@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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