China has said it will sell its aluminium-foil stockpile and has offered to buy more from foreign suppliers in exchange for lower prices.
The announcement by the Chinese state-owned China General Materials Group (CMG) came as it warned that the country’s aluminium-based economy could be at risk if global demand for aluminium continues to decline.
The aluminium-heavy industry has been suffering from a sharp drop in demand over the past few years, particularly from countries such as the US, Europe and Japan, with the price of aluminium increasing by more than 300 per cent in the past five years, according to the International Federation of Ironworkers (IFWE).
“This is an extremely serious development and a very important signal that we have to urgently strengthen our steel, aluminium and copper industries and safeguard our industry against any possible threat,” CMG Chairman Zhang Baogang told reporters in Beijing on Wednesday.
The company said it would buy up to 10 billion tonnes of aluminium from foreign producers, with about 1.3 billion tonnes to be used in steel, 1.4 billion tonnes for aluminium and 1.2 billion tonnes in copper.
Zhang, who has been in charge of the CMG since 2016, said the company’s steel and aluminium sectors would continue to grow.
“We will continue to strengthen the steel industry, steel-making industry and aluminium-making industries, and also increase our export capacity,” Zhang said.
The aluminum market is expected to reach more than $200bn this year, up from $70bn in 2016.
China has been a key market for aluminium for the past 15 years, when it imported a record $1.1 trillion worth of the metal.
In 2015, the country announced plans to sell up to 200 million tonnes of aluminum by 2021, with an initial target of 300 million tonnes by 2021.
China has been cracking down on steel imports and tariffs to encourage more domestic production.
Last year, President Xi Jinping ordered the closure of the world’s largest aluminium smelter, an investment that has also led to a sharp increase in the price per tonne of aluminium.
China is the world leader in aluminium production, with over 10 million tonnes produced in 2017, and its steel industry has also become increasingly important to China’s economy.
China’s aluminium industry is worth about $7.5tn and has more than 70 million employees, according, with production expected to continue increasing.