04 NOVEMBER 2014Shanghai Metal Market
China aluminum glut to worsen on massive expansions
Edited by : AL CIRCLE
1 min read
Aluminum oversupply in China will worsen in Q4 2014, and even more so into Q1 next year, as additional over 2 million-tpy new capacity will come on stream for the remainder of the year, Shanghai Metals Market foresees.
Currently, over 80% of China’s aluminum capacity is operating in the black in terms of cash costs, thanks to growing use of captive power, direct power feeds from other power plants, and falling prices of raw and supplementary materials, SMM data showed. Hence, smelters are actively bringing cost-efficient new capacities online.
For example, Baotou Aluminum Co., Gansu Dongxing Aluminum Co, and Inner Mongolia Jinlian Aluminum (Phase I) collectively put 700,000-tpy in new capacity into operations in H2. Moreover, other smelters, mainly in Xinjiang, are following suit, SMM’s survey found.
These massive expansions should drive a 500,000 tonne or 7% QoQ increase in China’s Q4 aluminum production, SMM estimates.
Currently, over 80% of China’s aluminum capacity is operating in the black in terms of cash costs, thanks to growing use of captive power, direct power feeds from other power plants, and falling prices of raw and supplementary materials, SMM data showed. Hence, smelters are actively bringing cost-efficient new capacities online.
For example, Baotou Aluminum Co., Gansu Dongxing Aluminum Co, and Inner Mongolia Jinlian Aluminum (Phase I) collectively put 700,000-tpy in new capacity into operations in H2. Moreover, other smelters, mainly in Xinjiang, are following suit, SMM’s survey found.
These massive expansions should drive a 500,000 tonne or 7% QoQ increase in China’s Q4 aluminum production, SMM estimates.
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