Chalco sees prospects for industry
Aluminum Corp of China (Chalco), the country's largest aluminium producer, said it remains confident about the medium to long-term prospects of the mainland industry despite an oversupply problem that may last for three years.
Both China and the world had a surplus of aluminium because of blind and duplicated investment in the past five to 10 years, said Chalco chairman Xiong Weiping.
'If demand recovers well, it would take about three years for oversupply to ease,' Mr Xiong said this week after the Beijing-based firm reported its third consecutive quarterly loss on falling aluminium prices and demand.
Chalco expects the mainland, the world's top producer of the metal, to smelt 13.2 million tonnes of aluminium this year, above consumption of 12.85 million tonnes, implying a surplus of about 350,000 tonnes.
But Mr Xiong said China's industrialisation and urbanisation would remain and demand for aluminium would increase accordingly.
President Luo Jianchuan said smelters were now making money as domestic aluminium prices were trading well above the industry's break-even point.
He said Chalco was resuming production in some of its plants. It plans to produce eight million tonnes of alumina, 3.4 million tonnes of aluminium and 600,000 tonnes of aluminium products, for the full year.
In the first half, it produced 3.2 million tonnes of alumina, 1.61 million tonnes of aluminium and 190,000 tonnes of aluminium products, which means output for the second half will largely increase.
Mr Luo said Chalco also planned to add 200 million tonnes of bauxite resources and increase the company's capacity to supply bauxite to 65 per cent over the next three years, from 55 per cent currently.