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Feature: No metal fatigue in China

The secondary metals industry in China is growing in impetus and with fast-rising production figures and plans, is becoming increasingly significant.

In 2004, production of secondary metals reached 3.2 million tonnes, which accounted for 22.4% of the total production of non-ferrous metals.

At the recent Fifth Secondary Metals International Forum in Guangzhou, China, Nonferrous Metals Industry Association vice-chairman Wang Gongmin said: “Domestic recycling of scrap metals tends to increase on a yearly basis and [the rise in] imported metals is also at a fast pace.” Big percentage increases were noted across the board in the production of all secondary metals. Copper rose by 24.7% to 1.16 million tonnes in 2004, while output from secondary aluminium production rose by 14.5% to 1.66 million tonnes.

Overall, secondary metals accounted for 22.4% of the total production of non-ferrous metals, with the figure reaching 3.2 million tonnes. Scrap steel consumption was 54.25 million tonnes, 20% of the total production of iron and steel.

Gongmin added that the domestic scrap metals supply had gradually become the main source of raw materials for China’s metals recycling industry, with figures expected to rise still further up to 2010.

This is predicted in the 11th five-year plan for China’s metals recycling industry, which also anticipates an upward trend for secondary copper consumption and domestic copper production. Figures for these are expected to rise to 6.30 million tonnes and 560,000 tonnes respectively by 2010.

The massive predicted growth is seen as endemic
of an industry which is increasingly gaining momentum. Following the introduction of market reforms some
20 years ago and China’s entry into the World
Trade Organisation in 2001, the country’s economy
has been continuing to expand at a rapid pace.

With aluminium consumption expected to grow from 6.24 to 15 million tonnes by 2010 and domestic production of aluminium predicted to rise from 1.63 million tonnes in 2005 to 3.88 million tonnes in 2010, Alcan senior vice-president Martha Finn Brooks has told the industry to be wary.

At the China Aluminium Forum 2003 she said:
“I caution the audience to be mindful of the potential pitfalls that can easily be overlooked in an environment where the upward arc of the demand curve seems to defy gravity.”

Periods of rapid growth – notably the golden era of the US aluminium industry between 1946 and 1973, when shipments grew at a compound annual rate of 8.5% – have been replaced by smaller growth of the mature industry. Influenced by factors such as the energy crisis of 1973, the introduction of commodity trading of aluminium in 1978 and the Russian metal shock in 1992-93, a further blow to the industry could follow should China’s domestic demand for aluminium and secondary metals stop increasing.

With growth planned for each year leading up to 2010, perhaps the words of Brooks should be remembered. But for now, production and plans continue to grow at a heightening pace, and to her warning Brooks added: “Rather than becoming a destabilising influence, we see China emerging as a dynamic and valued member of the global aluminium industry.”

With the added emergence of India, analysts suggest that the growth being experienced in both countries

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