The Hindu Business Line : Aluminium: China in driver's seat

China's impact on world aluminium production and consumption continues to be massive. Indeed, growth in world aluminium production has become significantly China-dependent.

Latest data suggest a world aluminium production growth of 6 per cent in 2006. In November alone, annualised world production was up 7.5 per cent year-on-year (year-on-year) with China growing an estimated 27 per cent year-on-year and the rest of the world only 0.7 per cent year-on-year.

During January-November 2006, of the total world production of 30,252 tonnes (28,537 tonnes in same period 2005), China accounted for 8,443 tonnes (7,106 tonnes), while the rest of the world produced 21,809 tonnes (21,431 tonnes).

18.8% rise in output

In other words, while China's production grew at 18.8 per cent in 2006, rest of the world grew at 1.8 per cent, demonstrating the driver's role China plays in the market.

The impact of closures in Europe late in 2005 is evident from the reported 4.3 per cent year-on-year decline in western European production in 2006, remarked an analyst.

From available data, it can also be inferred that world demand ex-China has grown by around 3 per cent this year, while Chinese demand has grown by 20.6 per cent year-on-year.

Chinese demand has benefited from strong growth in its main end-uses (construction, packaging etc) as well as substitution away from copper to aluminium in many applications, reasoned analysts adding that China now accounts for around 25 per cent of world aluminium demand compared with 22 per cent in 2005.