China’s Aluminium Demand Struggles As Trade Tensions Rise: CNIA

China’s Aluminium Demand Struggles As Trade Tensions Rise: CNIA

Domestic demand in the People’s Republic of China has suffered of late thanks to continuing blows to consumer confidence due to the ongoing trade tensions between the Middle Kingdom and the United States. Such was the message conveyed by the China Nonferrous Metals Industry Association late last week.

On Thursday, CNIA said that even a total removal of export taxes on key aluminium products and a drop in production capacity over the past several months has done naught to increase aluminium export volumes. Therefore, the Association opined, increased demand must come from within the country’s borders.

Though many domestic production segments have been weak over the last several months, especially that of automotive manufacturing, Beijing continues to encourage aluminium producers to develop new products for automotive and aerospace buyers.

The CNIA said that increasingly stringent import regulations on scrap aluminium makes it impossible for the country’s demand for it to be met. However, China expects to be a net importer of alumina for the year, continuing last year’s trend thanks in part to the lingering effects of alumina production shortages for most of last year.

Meanwhile, the government of the southern autonomous region Guangxi announced plans to increase production rates of both alumina and aluminium next year. The region’s refineries are expected to combine to bump production from 8.35 million metric tons per annum to 12 million metric tons per annum, while Guangxi’s smelters will increase ingot output to 4.8 million metric tons per annum, rising from the current rate of 2.05 million metric tons per annum.

The government went on to say that its target is for around 80 percent of its alumina would be refined domestically and an equal percentage of its aluminium ingots would be produced in the region by 2025. At present Guangxi’s aluminium output capacity is forecast to peak at 2.6 million metric tons per annum this year, up from 2.25 million metric tons per annum in 2018.