Supply and demand will be more balanced

Over the past few years, aluminum market has been overcapacity situation, Mukhamedshin said that large global aluminum producers losses or even shut down production capacity, the situation is particularly acute in 2012 and 2014, but it has significantly improved since period.Production capacity has been scaled back because aluminium capacity has been sharply adjusted in the past few years.

Since capacity has been scaled back, the market outside China has maintained a shortfall of more than 1m tonnes since 2013, while the industry has no big capacity expansion projects in the future.He cited the international aluminium association and CRU data, which showed that the global production of raw aluminum outside China increased by only 2.1 per cent to 10, 000 tonnes per year in the first nine months of last year.

On the Chinese side, he believes that China's aluminium supply has not increased from 2015 to 2016, due to the closure of unprofitable smelters and regulatory pressures.The government's supply-side reform plan, unveiled to tackle overcapacity, has also had a significant effect in the aluminium industry.In the first nine months of last year, China's production of raw aluminum fell by 2.7 per cent to 232.23 million tonnes.

Mukhamedshin said that while new capacity had been started in China since mid-2015, net capacity growth remained relatively low.And it will only be possible to reactivate production capacity in the event of continued increases in aluminum production costs, financing difficulties and increased regulatory scrutiny of environmental policies.

He noted that global aluminum supply has been slower to grow because of the increasing pressure on costs.The cost of aluminum smelting in China is still under pressure from rising coal, electricity, alumina and logistics costs.According to the supply and demand situation of the aluminum market, the supply and demand will be more balanced in the future.