China to slash nonferrous metals capacity

SHANGHAI (AP) -- China plans to slash annual output capacity of nonferrous metals by 1.5 million tons in the next three years, part of a wider plan to restructure and upgrade major industries including automakers and steel, a report said Wednesday. The plan, due for cabinet approval and release soon, is intended to reduce excess output of nonferrous metals. State media reports say similar guidelines call for consolidation of smaller steelmakers and automakers into larger, more competitive industrial groups. Over the next three years, 800,000 tons of annual aluminum smelting capacity, 300,000 tons of copper refining capacity and 400,000 tons of zinc smelting capacity would be eliminated under the plan, the state-run newspaper China Securities Journal reported. Three to five major nonferrous metals groups would be formed through consolidation of smaller smelters, it said. The plan would continue a process of consolidation that has left state-run, publicly listed giants like Aluminum Corp. of China to dominate such industries. China's economic planners were complaining about excess factory capacity in many industries, including aluminum smelting, long before demand for China's exports plunged last autumn, slowing consumption of many industrial inputs including metals. China produced 3.7 million tons of refined copper in 2008, up 10 percent on an annual basis, according to the National Bureau of Statistics. Zinc smelters produced 3.9 million tons in 2008. China has already suspended about 20 percent of its aluminum-making capacity due to slumping demand, with production expected to reach nearly 14 million tons this year, up 3 percent from last year. China had 160 million tons in excess steel producing capacity in 2008, with total output at about 500 million tons, according to industry figures.