Aluminum Industry in China (Market Report 2003) (PDF)

The paucity and opacity of data on China disseminated into the public domain perpetuate a longstanding asymmetry of information that no doubt works to the detriment of the Western World aluminium industry in its commercial dealings with China. This study seeks to contribute to stripping away the veil of opacity and to rank China in the global aluminium production system. This is attempted by evaluating China's rank from the demand side as well as from the supply side, using a set of generally accepted industry benchmarks. While previous studies appear to accord insufficient prominence to aluminium scrap recycling, this study treats it as an industry fundamental in its own right. Three key drivers of industry competition are accentuated, notably reserves/access to reserves, technological progressiveness and energy generation. These in turn have elicited a set of strategic responses and it is on this basis that China is assessed and ranked. The study finds that China?s reserves are comparatively thin but that in spite of this the country has carved out commanding positions within the global alumina and primary aluminium production systems. It is, however, a relative minnow in the global scrap recycling system. Importantly, the study also finds that despite its apparent dominant position in alumina and primary aluminium, China lags other leading competitors in technological progressiveness and responsiveness to the industry imperative of orchestrating a coherent and extensive raw materials sourcing strategy. Finally, by harnessing the Yangtze, China is poised to expand its already considerable energy generation capacity.