China's Aluminum Smelters Add 73% More Capacity Than Forecast
By Xiao Yu
May 8 (Bloomberg) -- Aluminum smelters in China, the world's biggest producer of the metal, may add 73 percent more capacity than forecast, according to research company Beijing Antaike Information Development Co.
New capacity under construction may reach 3.8 million metric tons, higher than an earlier estimate of 2.2 million tons, Wang Feihong, Antaike's chief aluminum analyst, said in a phone interview from Beijing today. Most of the new plants will start production in the second half, he said.
The expansion by companies including Aluminum Corp. of China Ltd. and China Power Investment Corp. will increase domestic supplies and may stymie expectations that China will become a net importer of the metal, damping global prices.
``The sudden rebound of investment in the aluminum industry may lead to unexpected supply increases in the second half, and we are not optimistic over the aluminum price,'' Wang said. The expansion is ``much faster than expected,'' he said.
Aluminum for three-month delivery on the London Metal Exchange has gained 21 percent this year after China and South Africa cut production because of power shortages. The metal traded little changed at $2,930 a ton at 11:30 a.m. Beijing time.
Some projects may be delayed because China may face power shortages, Wang said. Antaike is the research affiliate of China Nonferrous Metals Industry Association.
Aluminum Corp.'s Chairman Xiao Yaqing in August said China will become a net importer of the metal because of rising domestic demand.