China needs to curb small-scale aluminium production: industry assn

BEIJING (AFX-ASIA) - The government must curtail rising aluminium  production by small plants to avoid the threat of overproduction which could  hit prices, the China Daily reported, citing Zhao Jiasheng, office director  of the China Nonferrous Metals Industry Association.      Small producers, usually run by local governments, have been encouraged  to expand their output because of the 10 pct rise in aluminium prices last  year, Zhao said, but most of their production is of low added value and not  very profitable.      Imports are also rising after the government halved its tariffs on  aluminium imports last year.       Zhao warned that because of local government schemes, national production  capacity is expected to rise by 5.t's planned total of 3.2 mln tons.       The average annual production capacity of a Chinese aluminium plant is 24, 000 tons, compared with a world average of around 200,000 tons.      Nearly 90 pct of aluminium production in China comes from plants with  capacity of less than 50,000 tons.      Although China imports about a fifth of its aluminium needs, it should  not try to close the gap by expanding inefficient small-scale production.  Zhao said. Guo Shengkun, general manager of the Aluminium Corp of China  (Chinalco) was quoted as saying: "If over-production cannot be controlled,  many enterprises will become bankrupt especially when foreign giants come in  after China's entry into the World Trade Organisation."       Chinalco was created in February when six of the country's largest  alumina producers were merged. It supplies supply 70 pct of the domestic  market's alumina and 23 pct of its aluminum.			

Related stock : (NIL)