Though consumption is expected to slow, Beijing expects the country’s aluminium demand to rise as high as 50 million metric tons in 2023. So said the China Nonferrous Metals Industry Association in a forecast released on Thursday.
Per the CNIA, consumption will peak in 7 years due to the Chinese economy transitioning from a high-speed growth economy to a medium-to-high-speed growth economy, which will necessarily slow aluminium consumption.
Elaborating on the projections, CNIA Director Fan Shun Ke said that a decline in demand growth is typical of countries in a post-industrialization era. Government projections forecast a demand of around 6 percent between 2016 through the end of the decade, in contrast with rates above ten percent in prior such stretches.
In addition to a likely tempering in demand growth in the coming years, CNIA expects trade tensions between the Chinese and United States governments to inflict both short- and long-term changes on the Middle Kingdom’s aluminium exports. The Association urged aluminium producers to continue to seek ties to buyers in the Mideast, the Indian subcontinent, and Indochina.
The CNIA also counseled aluminium firms to establish bases in population centers around the world as a hedge against trade wars in the future.
China’s current aluminium production rate in August was measured at 37.71 million metric tons per annum, up slightly month-on-month from 37.31 million metric tons in July, per a report from Jinrui Futures that was also released this week.
Demand for the month is forecast to total 3.01 million metric tons, leaving a surplus of 200 thousand metric tons. In July, China’s domestic demand totaled 3.15 million metric tons, with a shortfall of 40 thousand metric tons in the month.
Jinrui expects total domestic demand for the year to be 36.94 million metric tons, with a projected surplus of 20 thousand metric tons. Projections for next year have domestic demand rising to 39.27 million metric tons, with a surplus of 310 thousand metric tons at year’s end.