China's refined aluminum demand in 2018 was forecast to rise 6% to 36.9 million mt from the estimated 34.8 million mt this year, state-run metals consultancy Beijing Antaike said.
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Demand from the aluminum alloy wall, aluminum bridge and solar aluminum extrusion sectors have risen in recent years, providing new demand growth amid a slowdown in growth in the major consumers -- construction, transport, electronics and power, Antaike said.
China's net refined aluminum imports in 2018 were seen at 30,000 mt, steady versus this year, Antaike data showed.
China's national aluminum supply was seen at 38.03 million mt in 2018, up 5.6% from 36.03 million mt this year, with a national aluminum surplus of 1.13 million mt next year, from a surplus of 1.23 million mt in 2017.
China had domestic aluminum supply of 18.59 million mt in the first half of 2017, up 19.8% year on year, Antaike data showed. Domestic aluminum demand was up 9.6% to 17.5 million mt, with a national aluminum surplus of 1.1 million mt as compared with a deficit of 440,000 mt in H1 2016.
Antaike forecast a fair number of new, low cost aluminum smelting capacity to be commissioned in 2017-18, paving a way for future domestic refined aluminum output growth.
But the gradual withdrawal of existing, high cost aluminum smelting capacity in China and the slowdown in the rate of domestic economic growth, will make it difficult for domestic aluminum demand to grow fast in 2017-18, Antaike said.
The agency forecast aluminum production growth in 2018 to slow to 5.6% for output of 38 million mt. National refined aluminum output in 2017 is forecast to be 36 million mt, up 10.3%.
CHINA TO ADD 7 MILLION MT/YEAR NEW ALUMINUM CAPACITY 2017-18
Antaike forecast aluminum smelting capacity growth in 2017-18 to be below previous expectations given the market, fund, environment protection and government policy factors, and estimated 7 million mt/year new refined aluminum output capacity would be added.
It predicted China to have national aluminum smelting capacity of around 47 million mt/year by the end of 2018.
It said over 80% of China's aluminum output capacity was equipped with their own power units, most of them thermal power ones.
The agency said supply-side reform meant the coal price gap in various parts of China was expected to narrow, so the power cost gap among the key aluminum production zones in Shandong, Shanxi provinces and Xinjiang and Inner Mongolia autonomous regions should narrow in coming years, with raw materials such as alumina, carbon anode, fluoride salt set to be the key factors affecting future aluminum smelting costs.
Antaike said the slowdown in investment in Chinese aluminum smelting projects would ease the conflict between domestic aluminum capacity growth and inventory growth, so supporting aluminum prices in the long run.