China 2010 aluminium demand seen up; users less bullish

* China primary aluminium demand seen steady next year * Smelters and analysts are more bullish than end-users * Exports remain a main concern for demand By Polly Yam KUNMING, China, Nov 30 (Reuters) - High production of primary aluminium may pressure the market next year even as China's consumption rises, analysts, smelter officials and end-users said. Delegates at a weekend conference in China's Yunnan province were split over prospects for consumption next year, with smelter officials and analysts looking for growth of as much as 20 percent but end users predicting another year of around 8-9 percent growth. Demand in China, both the biggest consumer and producer of metal in the world, has picked up in the second half of the year thanks to Beijing's stimulus packages, which have benefited the building and auto sectors. Strong demand from China has lifted global aluminium prices more than 30 percent this year, although this is the still the weakest performance amongst base metals because of high stockpiles and worries about rising Chinese output. "Next year's demand may rise below 20 percent," said a senior executive at smelter Qinghai Qiaotou Aluminium and Power Co Ltd, which operates 300,000 tonnes of primary aluminium capacity. He said demand from the auto and railway sectors would support consumption growth. Li Yang, senior analyst at state-backed research group Antaike, said consumption would rise 15 percent next year to 15.9 million tonnes after rising 8.7 percent this year, on the back of economic growth of at least 8-9 percent. "Investment in the property market should maintain this year's conditions. Auto output should rise and the high-speed railways may have a breakthrough," Li told the conference. He was referring to primary aluminium consumption. On Friday, a meeting of the ruling Communist Party reaffirmed the relatively loose monetary setting and active fiscal policy that China adopted a year ago as the financial crisis reached its peak, giving no sign that it was planning an early exit from its stimulus policies. END-USERS LESS BULLISH End-users of aluminium did not seem to be as bullish. "We are not putting high hopes on growth in 2010. If demand is about the same as this year, it should be good," said a senior executive at a large semi-finished products plant in Shandong province. He said the plant's orders had recovered in the third quarter and now was running at full capacity of 300,000 tonnes a year. "The question for next year's demand is how strong the central government's support will be." An executive at a hot-rolled products plant in Shanghai said the firm was running full capacity since May but doubted China's 2010 aluminium demand growth would be as high as this year. "We wonder whether or not the central government will continue to invest large amounts in the market," he said. He expected China's exports would not rise much because of trade barriers. He is not the only one concerned about exports. Yu Dongming, a director at the industry department of the National Development and Reform Commission, told the conference that trade protectionism may rise, hurting exports next year. But Yu said Chinese aluminium smelters and fabricators were still keen to expand capacity, which would add to supplies. Antaike's Li predicted China's production of primary aluminium would rise 24.7 percent on the year to 17 million tonnes next year, turning China into a net exporter after this year's record imports, and creating a surplus of 800,000 tonnes. Production of semi-finished aluminium products is expected to reach 18.7 million tonnes from an expected 16.78 million tonnes this year, a 12.5 percent increase from 2008, Antaike's senior analyst Wang Weidong told the conference. (Editing by Michael Urquhart)