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Wen Xianjun: Aluminum’s supply-side reform has yet to reap the same reform dividends as those enjoyed by industries such as steel.
2019-02-13
Since 2017, China’s supply-side structural reform has expanded from the coal and steel sectors to industries such as electrolytic aluminum. However, in contrast to the overall recovery seen in the steel industry, electrolytic aluminum producers have reaped only limited benefits and continue to grapple with widespread losses. At a recent conference, Wen Xianjun, vice president of the China Nonferrous Metals Industry Association, underscored two key points. First, China’s aluminum industry is currently at a critical juncture—navigating challenges while facing significant hurdles—but it nonetheless enjoys promising long-term prospects. According to Wen, the primary factors behind the sector’s current difficulties fall into three categories: first, a downturn in the macroeconomy has led to declining aluminum consumption in traditional markets, while emerging applications have yet to reach substantial scale, resulting in a shift in consumption patterns; second, trade tensions and their ripple effects have exacerbated adverse conditions in international markets; and third, although supply-side reforms in the aluminum industry have been vigorously advanced, they have not yielded the same price‑boosting gains observed in other traditional sectors like steel and coal.
Secondly, Wen Xianjun noted that it is essential to continue making solid progress in advancing supply-side structural reform in the aluminum industry. While this reform has yielded certain results—primarily through a reduction in production capacity—the industrial structure still requires further optimization. As the country now stands at a critical juncture in building itself into a global leader in the aluminum sector, the China Nonferrous Metals Industry Association is working with relevant national ministries and commissions to formulate a long-term strategy for the development of China’s aluminum industry.
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