06 MARCH 2013Platts
Antaike lifts China's 2013 aluminum output forecast
Edited by : AL CIRCLE
2 min read
China's domestic aluminum production is now expected to reach 25 million mt in 2013, up from a forecast of 24 million mt at the start of the year, an analyst at state nonferrous metals information division Beijing Antaike said Tuesday.
The latest forecast is 12.1% higher than the estimated 22.3 million mt produced in 2012. Actual figures for 2012 will be released later this month.
Despite prevailing weak domestic aluminum prices and some resulting smelter cutbacks in recent months, China's output will rise mainly due to new capacity in the western regions, where costs are low, the analyst said.
"As long as there are no major producers cutting back, output will continue to stay strong. We have not heard any yet and we doubt the big smelters will cut as it's too costly," the analyst said.
"There have been reports of some smaller smelters cutting, those with 30,000-50,000 mt/year capacity, but there are too few and their output is too small to have any impact. In comparison, the new capacity coming online in Xinjiang is much higher," he added.
Many companies have turned to investing in the western regions of China in recent years, where power costs are cheaper and resources abundant. An estimated 3-4 million of new capacity is available in the west, most of is expected to be ready by 2013-2014, Antaike said.
The front month March aluminum contract on the Shanghai Futures Exchange closed at Yuan 14,500/mt ($2,309/mt) Tuesday, up marginally from Yuan 14,415/mt Monday, and down from Yuan 15,130/mt on December 31, 2012.
The latest forecast is 12.1% higher than the estimated 22.3 million mt produced in 2012. Actual figures for 2012 will be released later this month.
Despite prevailing weak domestic aluminum prices and some resulting smelter cutbacks in recent months, China's output will rise mainly due to new capacity in the western regions, where costs are low, the analyst said.
"As long as there are no major producers cutting back, output will continue to stay strong. We have not heard any yet and we doubt the big smelters will cut as it's too costly," the analyst said.
"There have been reports of some smaller smelters cutting, those with 30,000-50,000 mt/year capacity, but there are too few and their output is too small to have any impact. In comparison, the new capacity coming online in Xinjiang is much higher," he added.
Many companies have turned to investing in the western regions of China in recent years, where power costs are cheaper and resources abundant. An estimated 3-4 million of new capacity is available in the west, most of is expected to be ready by 2013-2014, Antaike said.
The front month March aluminum contract on the Shanghai Futures Exchange closed at Yuan 14,500/mt ($2,309/mt) Tuesday, up marginally from Yuan 14,415/mt Monday, and down from Yuan 15,130/mt on December 31, 2012.
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