Canadian Stocks Rise Most in a Year on M&A Speculation, Metals

China, the world's largest producer of aluminum, is on course to become a net importer of the metal for the first time since 2001 because of surging demand from automakers and packaging producers. ``For China as a whole to turn from a net exporter of aluminum to a net importer is entirely possible, it's only a matter of time,'' Xiao Yaqing, chairman of the Aluminum Corp. of China Ltd., the country's largest producer, said in an interview in Hong Kong. He didn't give a timeframe for the reversal. Increased Chinese demand may lift prices of aluminum, which have lagged behind base metals in London in the past five years, rising only half as much as copper and nickel. China, also the biggest consumer of aluminum, encouraged imports by changing tax rates last month to curb output and save energy, which accounts for a third of the cost of making the metal. ``China will continue to curb the growth of energy intensive industries and restrict the start-up of new aluminum smelters,'' said Wang Feihong, chief analyst at Beijing Antaike Information Development Co. He projects China will become a net importer of aluminum as early as 2009. A reversal in China's aluminum market would follow a similar path to oil, where the nation's imports have more than doubled since 2001, contributing to a fourfold gain in oil prices since then. Some Chinese aluminum smelters are yet to meet the higher environmental standards on emissions imposed this year, Xiao said, casting doubt on forecast capacity expansions. Can't Support Demand ``These days people think China will produce everything the world needs, but in reality we don't have the natural and energy resources to support that,'' Xiao said. ``We are already paying a high price to meet domestic demand, not to mention exports. In the long term, China won't be able to support large demand for metals by itself.'' Demand for aluminum in China will rise 33 percent this year, triple the rate of global growth, Xiao said. Global aluminum consumption will increase 10 percent this year, up from a forecast of 8.9 percent, Alcan Inc. said July 31. The nation's production of aluminum slowed in June, when it rose 28 percent from a year earlier, compared with a 38 percent year-on-year growth in April. China produced 5.7 million tons in the first six months, a rise of 35 percent from a year earlier, the National Bureau of Statistics data showed July 20.