Alumina buying to rise 5.2pc this year as production fails to keep up with demand
Minmetals Resources, the Hong Kong-listed unit of China's largest metals trading group, plans to boost its alumina imports by 5.26 per cent this year as domestic production still falls short of surging demand.
The red chip, China's biggest alumina and aluminium importer, said it planned to import about two million tonnes of alumina this year, or about 30 per cent of the mainland's total buying, versus 1.9 million tonnes last year.
'China's domestic alumina production is at about eight million tonnes this year but demand is expected to be double that. So there is still a big shortfall of alumina supply in the Chinese market which can only be filled by imports,' executive director and deputy general manager Wang Lixin said.
At present, the mainland imports alumina at an average of US$530 to US$540 per tonne, according to Mr Wang. In July, shareholders of Minmetals, formerly Oriental Metals (Holdings), approved the purchase of the alumina and aluminium-related business of its state-owned parent, China Minmetals Corp, for $2.88 billion.
As part of the deal, Minmetals also bought China Minmetals' 30-year alumina supply agreement with Alcoa, the world's leading producer of alumina. Minmetals will receive 400,000 tonnes of alumina per year until 2027.
Driven by the growth of its construction, transport and home appliances industries, China has been the fastest-growing aluminium consumer for the past five years, with the industry expanding at a compound growth rate of 15.3 per cent per annum.
