…China leads the way in aluminum industry with growth in demand and sophisticated production efficiency

THE Organising

Doha, Qatar

Committee of the Arab International Aluminium Conference (ARABAL 2012), which will be held in Doha from 20^th to 22^nd of November 2012, said that this year’s edition of the conference will include a discussion panel on the aluminum industry in China. The discussion will focus on the factors contributing to the record demand and supply levels reported by China’s various industries – especially in view of the country’s leading position amongst the world’s industrial countries –and will feature a number of Chinese experts.

The committee commented that views vary when it comes to global production and growth forecasts, particularly in the major hubs of production. The EU economy ended 2011 on a weak note and with negative growth and forecasts which significantly impacted aluminium prices at the London Stock Exchange, causing them to drop to less than $2000 per ton in the medium term (3 months), as a result of recession and the debt crisis. Global compound annual growth rate is expected to fall to 3.9 per cent over the coming five years, with the exception of China which is projected to generate a compound annual growth rate of 9.1 per cent over the same period.

The committee said in a statement that in response to declining oil prices, producers have announced output cuts in Euro Zone countries and Australia, but thatthe situation was different in China. More production cutsareexpected in these regions in response to high energy prices and the new regulations governingcarbon emission from aluminium smelters. China aluminium production,however, hit a record level in 2011. Four additional projects in a number ofsectors were announced in the country. China is likely to be the sole importers till 2016, at steadylow levels due to nonstop production and growth in all areas. China will be self-sufficient for a longer period than expected, will benefit from lowerproduction cost than its competitors, and will have its energy efficient and high capacity smelters.

The statement continued: “It seems that China is not part of the trend towards production cuts as Asia is expected to account for the largest share of global aluminium production, with 25.5 million tonnes in 2011, 56 per cent of the global production which stood at 45.5 million tonnes.  China produced 19.1 million tonnes, accounting for 75 per cent of Asian production and 42 per cent of global production, while Middle East production was estimated at 3.8 million tonnes in 2011, only 15 per cent and 8.3 per cent of Asian and global production, respectively.  Europe accounted for 19 per cent of global production during the same period, while China is expected to produce 45 per cent of global production in 2012, with 2 per cent growth, and up to 47 per cent by end of 2013. The European share of the overall global aluminium production is set to decline to 17 per cent and 16 per cent in 2012 and 2013, respectively, while Middle East contribution is forecasted to remain steady near 8.4 per cent of global production during the same period”.

The possibility that forecasted diminishing production will affect the prevailing prices is not ruled out. Miscalculation of global demand for aluminium will result in surplus production in the form of reserves that will have negative impacts on current prices. Global demand for aluminium is expected to grow at 5.5 per cent in 2012. The largest portion of growth in demand will come from Asia, with 8 per cent growth and an overall production volume of 30.6 million tonnes. The overall global demand will reach 47.3 million tonnes. China will be in need of 21.1 million tonnes, the world’s largest growth rate, at 9.8 per cent. Growth is expected to be negative in the Euro Zone at 1.1 per cent.

As for consumption, China consumed 19.2 million tonnes of aluminium in 2011. This means that domestic production is not sufficient to meet the local demand. Chinese consumption of aluminium is expected to reach 21.1 million tonnes by end of this year, slightly in excess of local demand forecasts.

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Qatalum is an equal joint venture between Qatar Petroleum and Hydro Aluminium of Norway, with a production capacity of 600,000 tons of high-quality primary aluminium products per annum from twin 1.2 kilometre potlines. Qatalum’s complex facilities include a carbon plant, port and storage facilities, as well as a captive power plant. The state-of-the-art cast house produces value-added products such as extrusion ingots and foundry alloys that meet the stringent quality standards of Qatalum’s global customer base. Used in a variety of industries including the automotive, construction, engineering and in the manufacturing of consumer goods, by the end of its journey, Qatalum’s aluminium reaches the entire global community.

Qatalum has a dynamic and diversified work force, representing over 37 nationalities and is perusing industrial diversity for Qatar and its people by actively creating a future of environmental sustainability and economic opportunities.