Industry association takes fresh initiative to tackle Chinese aluminum glut concerns

BEIJING (Scrap Monster) : The Chinese industry association in its efforts to address the aluminum overcapacity concerns, organized a high level meeting of industry majors and government officials.

The country’s China Non-ferrous Metal Industry Association (CNIA) brought together the leading aluminum makers in the country and top officials from various related government departments in order to arrive at a solution to the overcapacity worries that loom over the country’s aluminum industry.

According to CNIA, nearly 50% of the aluminum smelters in the country are running in losses. The global aluminum demand has sizably weakened during recent times and the prices have plunged. It remains a fact for many a smelter that the production costs are higher than the selling price for aluminum. According to a recent survey conducted by CNIA, 89 out of the 281 large-scale aluminum smelters were incurring losses.

The meeting proposed to control the total production capacities. It was also decided to implement a differential electricity prices. The meeting also urged the Government to devise policies that would favor the enhanced usage of aluminum in various sectors and industries including power, transportation and home furnishing.

According to industry sources, China is exercising tight control over the plans to build around 10 million tonnes new facility in Xinjiang province. Last month, local governments were strictly instructed to block all expansion plans of existing aluminum production capacities. The government is said to release fresh curbs on expansion by this month end.