Chinalco expects China's aluminium demand growth to surpass GDP

Ge Honglin, chairman of Aluminum Corp of China or Chinalco, China’s biggest state-run aluminium producer said that consumption of aluminium is set to increase by 9-10 per cent in 2017 on the back of strong downstream demand. Aluminium demand is expected to grow faster than the country’s gross domestic product (GDP) in 2018.

The aluminium consumption is expected to be around 26.25 million tonnes in the first three quarters of 2017, up 9% YoY, with peak end-year demand yet to come.

This was communicated after he represented his company in China’s 19th Communist Party congress as a delegate.  Huge consumer demand, he said will open the door for healthy development of the global aluminium industry.

China’s estimated GDP growth for 2017 is around 6.5 per cent this year. The International Monetary Fund sees China’s GDP climb over 6.5% in 2018. He also added that winter capacity cutback in China will only impact its alumina processing plants in Shandong and Henan.  Ge said that rising prices of alumina, carbon and power have increased production costs by 14 per cent this year.

According to him, aluminium demand from China’s packaging sector was up by 20% in January-September, while demand from real estate, transportation and electronic products grew by 8% and the power sector by 5 per cent.

Chinalco’s listed subsidiary, known as Chalco agreed in September to invest $500 million in a project to process bauxite in Guinea.