Energy-intensive sectors booming despite efforts to reduce waste Aluminium, cement and electricity production accelerated in the first half of the year, defying attempts by the central government to put the brakes on energy intensive and heavy polluting industries. The mainland economy, which grew at the fastest pace in more than a decade in the second quarter, is sucking in more raw materials than estimated despite efforts to dampen demand by reducing export subsidies and imposing new taxes. DBS Vickers Securities analyst Helen Wang said growth in metal output was stubbornly high, but Beijing may wait before introducing new measures to cut production. Aluminium output grew an impressive 34.9 per cent in the first six months of the year, compared with 19.7 per cent for the whole of last year. That beat the 25 per cent estimated by state-backed industry researcher Beijing Antaike and 14 per cent projected by the National Development and Reform Commission. The government announced on Thursday that it would abolish a 5 per cent tax on imports of aluminium and impose a 15 per cent tariff on exports of rods and bars made from the metal from August 1. The government is attempting to slow output at mainland factories amid concern the economy is overheating and contributing to increasing water and air degradation. Year-on-year output growth of cement edged up to 16 per cent in the first half from 15.5 per cent last year. Steel production grew 18.9 per cent, below the 19.7 per cent recorded for all of last year, but far outpacing the 10 per cent growth forecast by the China Iron & Steel Association in January. The association had expected the reduction of value-added tax rebates for exports and the imposition of a tariff on steel exports last year would have an impact. Daiwa Securities' Geoffrey Cheng Bik-hoi said the government's policies had started to take effect in the second quarter on steel and aluminium production but they still remained high. Year-on-year growth in aluminium production fell from 40 per cent in February to 38 per cent in April and 28.1 per cent last month. The boost in steel and aluminium production lifted output at power stations, with electricity production surging 16 per cent in the first six months of the year. That exceeded the 10 per cent to 12 per cent growth predicted by power distribution monopoly State Grid Corp in January. Output at dirty coal-fired power plants increased 18.3 per cent in the first half, compared with 1.7 per cent for hydro units. Strong power generation also helped lift raw coal output 11.4 per cent in the first half, compared to 8 per cent last year. Ms Wang expected full-year coal output to remain high, possibly reaching 11 per cent to 12 per cent as more capacity is released. The figures called into question Beijing's chances of meeting its target to cut the average annual output growth of the mainland's coal industry to 3.4 per cent between 2006 and 2010.