China sets stricter rules for aluminum to tackle overcapacity
Post Date: 26 Jul 2013 Viewed: 357
According to the Ministry of Industry and Information Technology, China will raise production requirements and controls to rein in further expansion in its bloated aluminium sector 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 help such as credit from the government, according to a statement on the ministry website.
The industry ministry said that 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.
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 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 sectors for about a decade but plans have faltered due to resistance from local governments anxious to boost growth.
Revised regulations for the sector include a ban on the construction of new 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.
New and upgraded aluminium smelting capacity will be required to have electricity consumption of 12,750 KWH to 13,200 KWH per tonne, compared with existing capacity which is required to have 13,350 KWH to 13,800 KWH per tonne.