China is the world’s fastest growing and second largest economy. Over 46% of China’s
soaring GDP comes from the country’s rapid industrial growth. This industrial growth
is predominantly driven by the massive urbanization taking place which is increasing
demand for aluminium and the raw materials used in its production. Due to unmatched
growth rates, China, which now plays the dominant role in the global aluminium market,
is expected to remain the world’s largest aluminium consumer throughout the next 10-15
years. Already accounting for 41% of global aluminium consumption, China is forecast
to boost this share to 52% by 2025.
China’s economic growth is largely fuelled by the country’s increasing population and
large-scale urbanization. On the back of a surge in urban population along with the
increase in average income China is now seeing a growth of the middle class – the major
consumer of aluminium products. According to McKinsey Global Institute, from 2007 to
2025, the growing Chinese cities will account for 30% of global GDP growth.
China rural and urban population growth
The transport and construction industries jointly account for 35% of total aluminium
consumption in China. Hence, the development of these industries will have a substantial
impact on the Chinese demand for aluminium. It is expected that the urbanization along
with the urban income growth will drive the growth of transport and construction in
China, thus propelling demand for aluminium.
Aluminium Consumption in China by industries
Aluminium Consumption in China by regions
China’s national environmental programme, aimed at increasing the industry energy
efficiency and reducing CO2 emissions has led to a shutdown of a number of country’s
aluminium smelters and caused a plunge in Chinese domestic aluminium production.
The environmental targets, set by the Chinese governmnent for 2020, are now met only
partially, which is why the further implementation of this programme will keep impeding
the development of the aluminium industry in China. High energy rates, adversely
affecting the production profitability are also a handicap for the Chinese industry growth.
The Chinese domestic production, which grows by 9.8% per year is behind the local
consumption growth, estimated at 12.9% per year, which results in the increasing share of
imported aluminium. By 2015, the import of aluminium to China is expected to increase
by more than 25 times, reaching 3-4 million tonnes.
