HONG KONG, Reuters:
CHINA IN the second half will add at least 2.15 million tonnes of alumina capacity, trimming import demand of the world's largest spot buyer and potentially weighing down world prices, industry officials said last Friday.
The new capacity to be completed in the second half will raise China's alumina capacity by about 30 per cent to at least 9.7 million tonnes by the end of this year, from about 7.1 million tonnes last year. Two refineries of state-controlled Aluminum Corp. of China Ltd., the country's dominant producer, would add combined capacity of 1.5 million tonnes of alumina, from which aluminium is made.
Two new refineries in Henan with a total capacity of 650,000 tonnes a year would also be completed by December.
EXPAND PRODUCTION
"We are going to start production in October," an official of Aluminum Corp. said, referring to the 700,000-tonne-per-year new facility at its Zhengzhou refinery in Henan.
He said the company's other refinery, Zhongzhou, in Henan had expanded capacity by 400,000 tonnes in March. Aluminum Corp.'s refinery in Shanxi was running a trial at its new 800,000-tonne-a-year facility, another official said.
Aluminum Corp. forecast its alumina capacity would rise to 8.5 million tonnes by the end of this year, with production set to hit 7.2 million tonnes - up 7.7 per cent from last year.
China consumes about a fifth of the world's aluminium and imports about half of its alumina. It imported 25.8 per cent more alumina from a year ago to 4.24 million tonnes in the first seven months.
Strong demand from China has pushed up world prices for spot alumina 14 per cent so far this month to about US$500 a tonne to Chinese ports.
NEWCOMERS
Privately owned Hui Yuan Chemicals was about to complete building of a 300,000-tonne-per-year alumina refinery in Pingdingshan city in Henan, a senior executive said. "We are improving the facility to meet government's environment requirements," he said.
The state environment bureau in April asked Hui Yuan to stop building the 1.5 billion-yuan (US$185 million) worth refinery, saying the project did not meet its requirements. The executive said Hui Yuan had received the approval from the bureau on August 9 after improving the design of the refinery.
Also in Henan, the first phase of a 1.05 million-tonne-a-year alumina refinery in Mianchi was scheduled to complete in December, a source close to the project said.
TRANSFERRING THE STAKE
Privately-held East Hope Group directly owns a 75 per cent stake in the Mianchi refinery, which will be built in three equal phases, after buying a 24 per cent stake from aluminium producer, Henan Mianchi Zhongmai Aluminum and Electricity.
"We are in the process of transferring the stake," an official for Mianchi Zhongmai said. Mianchi Zhongmai had wanted to give up its entire holding to help Aluminum Corp. take a majority stake in the project, but industry officials said East Hope wanted to maintain a majority stake, triggering the bigger player to pull out.
East Hope's Hong Kong-based subsidiary holds 13 per cent of the project and U.S.-based trading house Gerald Group has 12 per cent, the officials said.
China produced 4.67 million tonnes of alumina in the first seven months this year, up 17.5 per cent from a year ago.
