Is There Overcapacity in Primary Aluminium Industry?

Abstract

• Overcapacity of primary aluminium is local surplus. In traditional aluminium producing provinces such as Henan and Shandong, excess capacity does exist; but in western China, the industry still has large room for development. The claim that primary aluminium industry in the whole country suffers overcapacity lacks theoretical and data supports.

• The coastal regions of China have high population density, and developed industry, leading to shortage of electricity and higher electricity bills. Production of primary aluminium consumes large amount of electricity; therefore, to optimize the allocation of resources, the distribution of aluminium producers should be adjusted. The center of primary aluminium production should be moved to the resource-rich west. This adjustment is in line with laws of economics, and will help energy saving, emission reduction, and environment protection.

• Storage of primary aluminium is storage of energy. The government should enlarge China’s strategic stockpile of primary aluminium.

• Light-weighted, durable in use, and easy to store, aluminium products may be widely used in the production of automobiles and doors and windows of constructions. If the government builds more low-rent housings for low-income groups, primary aluminium industry will not face overcapacity; instead, it will scale new heights.