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Metal Recycling News June 03, 2013 11:00:47 AM

Global aluminum surplus worries may aggravate despite widespread capacity cuts

Paul Ploumis
ScrapMonster Author
The global overcapacity worries are there to remain, despite widespread production cuts planned in certain regions of China-the top producer of aluminum

Global aluminum surplus worries may aggravate despite widespread capacity cuts

BEIJING (Scrap Monster) : The global overcapacity worries are there to remain, despite widespread production cuts planned in certain regions of China-the top producer of aluminum. The production cuts are feared to be countered by new smelters ramping up production elsewhere.

The Chinese mills have already cut primary aluminum production capacity by nearly 1 million metric tonnes this year. The country is planning further cuts to the tune of around 300,000 tons before the year-end. The recently concluded World Aluminum Congress at London however forecasts that the planned production cuts may not be sufficient enough to alleviate the global surplus worries of aluminum.

The abundant resources of coal have resulted in the northwest Xinjiang province commissioning new smelter capacities, augmenting the country’s aluminum output.

The big players-Russian Rusal and American Alcoa have already announced plans of further production cuts. The proposed production cuts are likely to bring down the global aluminum output by at least 1 million more tonnes.

The World Aluminum Congress states that immediate closure of at least 3 million tonnes capacities is required immediately to solve the overcapacity worries to some extent. Drastic measures need to be taken to bring down the 12 million tonnes inventory. The global demand for aluminum has not yet picked up, as per studies. The prices too, which plunged to one-third from the peaks, are not showing any sign of recovery.

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