Chinese Non-Ferrous Industry Investments Red Hot, Government Seeks Cool Down

Investments have increased $7.1 billion and production levels are at record highs; the government is trying to curb expansion but recognizes need for materials supply.

While China is attempting to restrict inefficient production capacity expansion in its metals resource sector, the materials supply needs to be maintained to keep with the growth rate of industrial and infrastructure expansion, according to recent research by Industrial Info Resources.

According to the research, Kang Yi, president of China Nonferrous Metals Industry, noted that in 2006, output of single variety non-ferrous metals was at record levels.

The non-ferrous industry increased year-on-year $7.1 billion, reaching $14.42 billion. Nearly 3 million tons of copper, 9.3 million tons of aluminum, 2.7 million tons of lead, 3.2 million tons of zinc, 107,700 tons of nickel, 138,100 tons of tin, 150,100 tons of antimony, 542,200 tons of magnesium and 13,300 tons of titanium were produced, the report said.

The report cautioned that while the industry is expected to continue to grow throughout 2007, it will be hampered by development challenges, availability of resources, energy conservation and strict control of macroeconomic policy.

Within the aluminum sector, investment in aluminum smelting increased 124.3 percent year-on-year in the first two months of 2007. In response, the National Development Reform Commission (NDRC) pushed to curb investment in the sector. Now that there is an oversupply of aluminum and prices are slipping, the NDRC is seeking to stop aluminum projects that fail to meet industry policies, environment evaluation and other similar regulations, the report said.

As the NDRC was making its recommendations, the General Customs Administration reported that China’s aluminum and aluminum allot exports dropped 51 percent to 141,965 tons in the first quarter when compared to the same period 2006, the report added.

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