China aluminium demand seen up 15-20 pct through 2011

HONG KONG, July 13 - Consumption of primary aluminium in China, the world's top user of the metal, is likely to grow at an average of 15 to 20 percent per year from now to 2011 and the country could become a net importer by 2010, industry officials said on Friday. "From now to 2011, the average growth of demand for aluminium should be around 15 percent," Wang Feihong, principal aluminium analyst at state research group, Antaike, said. "If any year before 2011 sees output growth fall to below one million tonnes, the aluminium market could have a deficit," he said. Wang said strong demand from China's transport and power sectors could see consumption grow by as much as 35 percent to 11.75 million tonnes in 2007, and 25-27 percent in 2008. The building of new production capacity had also driven up consumption of the metal, a manager of a fabricating plant in Nanhai city in the southern Guangdong province said. He said more than 600,000 tonnes of aluminium had been used in startups of new capacity this year. China has already seen additional capacity of about 900,000 tonnes of capacity come onstream in the April-to-June quarter and is likely to add a total of 3.5 million tonnes of capacity this year. NET IMPORTER The burgeoning Chinese consumption and a move by Beijing to restrict new production capacity due to energy and environmental concerns may limit the country's aluminium exports and make China a net importer of aluminium by 2010, the industry officials said. "In the next five years, consumption could rise around 20 percent on average," the fabricating plant manager said. "We are willing to invest in aluminium smelter. Why not? Doing business is always a profit-driven matter," the manager said. Antaike sees production of primary aluminium rising 32 percent to 12.4 million tonnes this year and up 25 percent to 15.5 million tonnes next year. Wang said output in 2009 was uncertain because some new capacity due to come in coming year was not disclosed. With the healthy profit margins they are experiencing, China's aluminium smelters are unlikely to be selling their assets in a Rio Tinto Ltd/Plc and Alcan Inc type of merger, industry officials said. Aluminium smelters now can make profits of more than 3,000 yuan per tonne in China, where costs of building a smelter was about 10,000 yuan per tonne of capacity. "Smelters usually are willing to sell assets only when they are no longer to take more losses," Wang said. Aluminum Corp. of China Ltd. is the country's largest producer of the metal. ($1=7.5700 yuan)