Feb. 26 -- China, the world's biggest producer of aluminum, may be forced to reduce output within the next six months because of higher costs for materials and electricity, Alcan Inc. Chief Executive Officer Richard Evans said.
The cost of smelting aluminum in China is among the highest in the world, Evans said today at a mining-industry conference in Tampa, Florida, that was broadcast on the Internet. Montreal- based Alcan is the world's second-biggest aluminum producer.
China, which accounts for about 28 percent of global aluminum supply, reopened some of the 1.5 million tons of idled smelting capacity last year when the cost of alumina plunged, Evans said. Alumina, an ore used to make aluminum, fell to as low as $200 a ton from about $600, he said.
"We expect another four to six months of increased production in China and then a gradual, steady decline," Evans said. "The drop in alumina prices was a huge stimulus for China to bring back idled capacity."
China is also the world's largest consumer of aluminum, accounting for about 24 percent of world demand last year as economic growth of more than 10 percent in the last two years fuels demand for the metal used in beverage cans and airplanes.
Annual consumption in China may increase to at least 20 kilograms (44 pounds) a person from 8.5 kilograms within the next five to 10 years as industrial growth accelerates and more of the country's population moves to the cities, Alcan has predicted. Global output will exceed demand by 200,000 tons this year, erasing a deficit last year of 160,000 tons, Alcan said.
Alcoa Inc. is the world's largest aluminum producer.
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