China's Ministry of Industry and Information Technology will issue policy to reduce overcapacity in the electrolytic aluminum industry

On July 31st, China's Ministry of Industry and Information Technology Raw Materials Division has issued the general operation situation of the nonferrous metals industry in the first half year, which shows that currently, nonferrous metals industry is faced with three problems: outstanding overcapacity, high production cost, and shrunk market demand, especially in the electrolytic aluminum industry. The next step is to issue and implement the specific measures to reduce overcapacity in the electrolytic aluminum industry.

Now, many industries is confronted with excess smelting capacity, especially in  the electrolytic aluminum industry. There is 10 million tons of capacity is under construction, and from January to June, the electrolytic aluminum industry suffered a loss of 0.67 billion, decreased by 57% year-on-year. The rising price of the domestic power, energy, mining resources and financial costs lead to the high production cost of the enterprises. January to June, the cost of main business in the nonferrous metals industry increased by 16.3%. The capacity of the enterprises which has power plant only occupied 60% of the whole capacity. In the Central and Eastern region, the electrolytic aluminum enterprises suffered heavy loss, and some enterprises shut down. On account of the slowdown of global economy, and weak demand of major economies, demand in the domestic and overseas nonferrous markets slowed rapidly. January to June, the import and export value of copper and aluminum products both decreased.

The Raw Materials Division predicts that in the next half year, the price of nonferrous metals products will keep low, enterprises will have great pressure, and the whole industry will in a state of low-profit.

In addition to issue the specific policy to reduce overcapacity of electrolytic aluminum, the Ministry of Industry and Information Technology will revise the admittance conditions of the copper, lead, zinc, and other industries. It will support the enterprises to speed up technology transform, energy conservation and emission  reduction, and elimination of laggard capacity, and encourage the enterprises to develop new materials,and  adjust industry structure.