28 April
Shanghai,
Dow Jones

SHANGHAI (Dow Jones)-China’s aluminum output growth is expected to slow to 20% this yeara gainst 34% last year because of an unusually harsh winter in the south, but is likely to pick up in the second half as more capacity comes on stream, a senior industry analyst said.

'As consumption growth is likely to slow down along with production, the average aluminum price will probably just be slightly lower than last year’s,' said Wang Feihong, chief of aluminum research at state-owned metals consultancy Antaike in Beijing.

The total aluminum output is likely to reach 15.1 million metric tons this year, with the snowstorm in January-February estimated to result in a loss of 450,000 tons, Wang said at an industry forum over the weekend.

'The big smelters won’t be back to normal until end-May, so the second-quarter output growth will also be affected.'

Data provided by the China Nonferrous Metals Industry Association showed aluminum output in the first quarter rose 11% on year to 3.15 million tons, 0.8% higher than data published by the National Bureau of Statistics.

However, with more production capacity coming on stream in the third quarter, growth will accelerate in the second half of this year, Wang said.

Meanwhile, 'a global economic slowdown, appreciation of the yuan and tightening macroeconomic measures all point to a slower growth of consumption this year to 22%,' he said.

According to Antaike, China’s aluminum consumption last year grew 38% from 2006 to 12 million tons. It has forecast a consumption of 14.64 million tons this year.
The average aluminum price this year may fall to CNY19,000 a ton from CNY19,575/ton last year, Wang said.

China is the world’s biggest aluminum producer and consumer.