Overcapacity - A Serious Issue before Non-Ferrous Industry in China

Delhi, India (PressExposure) May 22, 2007 -- In its recent report on “China Non-Ferrous Industry Analysis”, RNCOS has found that China’s Aluminium industry is facing serious glut. Moreover, aluminium industry’s utilization rate is just 75% (as of 2005), which implies a significant amount of unused capacity.

Overcapacity has emerged as an eminent problem over the past few years along with added production through newly finished projects in sectors such as electrolytic aluminum, coke, ferroalloy, steel, copper smelting, and calcium carbide. Price of steel, for example, continued to drop since the 2Q 2005, which was attributed to an excess of production capacity surpassing the demand.

At year-end 2006, annual aluminium production capacity of China was 12 Million Tons and by January this year (2007) it had reached 11 Million Tons. This indicates that aluminium mills in the country are operating at nearly full capacity, said CNMIA, as reported by RESOURCE INVESTOR on March 9, 2007.

It’s expected that in spite of working at 20% below capacity, the country is still going to produce 8% above forecasted consumption, assuming 25% rise in domestic consumption this year (2007). Output of primary aluminium in China is expected to cross 12 Million Tons mark this year, 27.7% up from 2006. Antike – a Beijing based information provider for the mining & metals industry of China – has forecasted that there is going to be a worldwide overcapacity of 300,000 Tons of the metal.

According to the RNCOS report on “China Non-Ferrous Industry Analysis”, “Since 2002, aluminium production in China has shown intimidating growth. It grew by over 100% in 2006, as compared to the growth in global production of the metal that remained 12.79% over the same period.” The report further adds, “Chinese aluminium industry is concentrated with numerous companies lacking in economies of scale & running at low efficiency.”

The report further provides extensive research and objective analysis of Non-Ferrous Industry In China. This report helps clients in analyzing the opportunities critical to the growth of The Non-Ferrous Industry In China. Issues covered in this report include: the impact of Chinese non-ferrous industry on the global non-ferrous industry, opportunities and challenges before the China non-ferrous industry, etc.

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RNCOS, incorporated in the year 2002, is an industry research firm. It has a team of industry experts who analyze data collected from credible sources. They provide industry insights and analysis that helps corporations to take timely and accurate business decision in today's globally competitive environment.

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Press Release Submitted On: May 22, 2007 at 6:24 am
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