Citing an “irrational surge” in aluminium prices, the China Nonferrous Metals Industry Association (CNIA) met earlier this week to discuss prices reaching highs not seen in over a dozen years.
At the Shanghai Futures Exchange, primary aluminium reached US$$3,332 per metric ton, besting August 2008’s previous high. Prices sparked in large part due to fears that capacity cuts to reduce power use would result in a serious supply crunch.
CNIA’s research arm Antaike said in a statement that ten members met to discuss prices, including Aluminum Corp of China Ltd (Chalco) and China Hongqiao Group. Attendees could identify no “obvious gap” between supply and demand for the third quarter, and the group pledged to offset rising costs with greater efficiency.
“Companies will continue to ensure supply and stabilise market expectations,” said the CNIA in a related statement.
The participants in the meeting agreed that prices that are kept “within a reasonable range is conducive to the stability and long-term development of the industry.”
The CNIA would “take the lead in maintaining the order of commodity market prices and creating a good industry ecology,” they promised.
Chinese producers continue to seek balance with mandated capacity cuts in recent months and years. Though aluminium smelting capacity in China is gradually switching to more sustainable power sources in the country’s southern region, a great deal of capacity remains in northern climes and subject to curbs on capacity powered by coal. With China’s renewed focus on environmental responsibility, coal-fired power generation has come under greater and greater scrutiny, prompting Beijing to enact mandatory production caps in northern and western provinces.