The trading arm of Aluminum Corp of China expects China's production of primary aluminium to rise 10.5 percent this year as capacity grows, even as weak aluminium prices spurred some smelters to delay the start-up of new capacity in January, said a report on the company's website (www.chalco.com.cn)
Chinalco is the country's top aluminium producer through its listed Chalco .
The trading arm, China Aluminum International Trading Company, sees more new capacity coming on stream in the second half of this year, which would push up full-year production of primary aluminium to 21.5 million tonnes.
"2012's output would rise at least 10.5 percent from 2011," Li Dongguang, president of the trading unit wrote in the report on a Chinalco newsletter published over the weekend.
Global output, including China, would rise 7 percent to 48.8 million tonnes in 2012 from 2011 as capacity in China, the Middle East and India rises, even if some plants that rely on expensive energy supply may cut production should world aluminium prices fall.
The world's top aluminium producer RUSAL Plc said on Monday that it expects a total production cut of 3.9 million tonnes, about 8 percent of its previous 2012 production forecast, and takes forecast global output to around 48.75 million tonnes.
Li said the firm expects world consumption of primary aluminium to rise 6.4 percent to 48 million tonnes in 2012 from 2011, a figure that is lower than the firm's output prediction of 48.8 million tonnes.
Of the expected world demand, China would consume 21.3 million tonnes this year, marking a yearly rise of 6.6 percent.
Slowing growth in Western economies may restrict demand in those countries and exports of aluminium products from China, he said.
The firm sees a risk of lower world aluminium prices in the first half of this year and prices are expected to rise in the second half.
Prices of benchmark three-month London Metal Exchange aluminium are expected to range between $1,900 and $2,600 a tonne this year, Li said in the report.
Shanghai Futures Exchange third-month aluminium contract prices are expected to range between 15,500 yuan ($2,500) and 17,500 yuan a tonne this year.
Three-month LME aluminium traded at $2,207 a tonne on Tuesday and the third-month Shanghai contract ended at 16,120 yuan a tonne.
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