Chine government will raise production requirements and controls to rein in further expansion in its bloated aluminium melting industry, the Ministry of Industry and Information Technology said on Wednesday, as the government gets serious about tackling a string of industries that are facing overcapacity problems.

 

The ministry would publish a list of firms that meet the new requirements and the firms would receive to help such as credit from the government, according to a statement on the ministry website (www.miit.gov.cn).

 

Higher requirements could mean some existing aluminium smelters shut their capacity for upgrading before end-2015, restricting production of primary aluminium in the world's top producer of the metal.

 

The stricter controls were aimed at tackling overcapacity and pushing company mergers and restructuring, said the industry ministry.

 

The statement also said dealing with overcapacity would be its focus in the second half of the year as it looks to transform and upgrade sectors such as steel, cement, shipbuilders and glass makers ¨C all of which are facing the double whammy of production gluts and a slowing economy.

 

China, whose new leaders are trying to rein in excess credit growth that has led to asset bubbles, has sought to tackle overcapacity in the aluminium and steel industrys for about a decade, but plans have faltered due to resistance from local governments anxious to boost growth.

 

Revised regulations for the aluminum sector include a ban on the construction of new aluminum smelting plants at environmentally sensitive zones, raising the production capacity of alumina refiners that use bauxite imports and setting stricter limits on power consumption and emissions, the ministry said.

 

New and upgraded aluminium smelting capacity will be required to have electricity consumption of 12,750-13,200 kwh per tonne, compared with existing capacity which is required to have 13,350-13,800 kwh per tonne.

 

In Henan, the top aluminium producing province in China, the bulk of smelters used less than 14,000 kwh to produce one tonne of primary aluminium currently, Zhang Chenguang, analyst at information provider SMM said.

 

He did not provide the capacity in China that use more than 13,800 kwh to produce one tonne of aluminium.

 

China has more than 27 million tonnes of aluminium smelting capacity currently.

 

Source: www.alcircle.com