MIAMI Overproduction in the global aluminum market that has led to low prices is mostly concentrated in China, according to United Co. Rusals director of supplies and logistics, Yakov Itskov.
China accounts for about 44 percent of the worlds rapidly growing aluminum consumption, but prices remain low due to overproduction and overcapacity in the country, Itskov said at AMM sister publication Metal Bulletins 19th Bauxite and Alumina Conference in Miami.
"(Global) aluminum consumption has reached 47.4 million tonnes per year, but the market is still under pressure of low prices due to overproduction, and the overproduction is concentrated in China," Itskov told delegates.
Itskov pointed to government intervention as the reason for overproduction in China, as well as to the countrys lack of exports. "China doesnt export aluminum because there is no VAT (value-added tax) reimbursement. Chinese policy also supports high domestic prices," he said.
Rusal said in August that it would cut 275,000 tonnes of annual production by 2018 (amm.com, Aug. 27), but in announcing a 2012 loss last month it said it would cut 300,000 tonnes this year alone (amm.com, March 4).
A version of this article was first published by AMM sister publication Metal Bulletin.