China to add 3 mln T of aluminium capacity in 2021 - Antaike

    * More than half new capacity to come from hydropower-rich Yunnan
    * Antaike now expects China aluminium consumption to rise in 2020
    * Sees 820,000 T net primary metal inflow, double earlier forecast

    By Min Zhang and Shivani Singh
    CHONGQING, China, Oct 14 (Reuters) - China will launch another 3
million tonnes of annual aluminium production capacity in 2021 - more than
half of it in the emerging smelting hub of Yunnan province, research house
Antaike said on Wednesday.
    Abundant hydropower for the energy-intensive smelting process has
brought major aluminium producers like China Hongqiao Group to
Yunnan after the government, which plans to limit capacity to about 45
million tonnes, said companies would need to be in clean-energy-rich areas
to keep developing.
    Antaike, the research arm of the China Nonferrous Metals Industry
Association, sees 1.88 million tonnes of capacity coming on stream in
Yunnan, in southwest China, next year, following 1.63 million tonnes this
year, analyst Wang Hongfei said at the China International Aluminum Week
conference in Chongqing.
    It also expects 370,000 tonnes to launch in Guangxi, 550,000 tonnes in
Inner Mongolia and 100,000 tonnes apiece in Shanxi and Guizhou in 2021. 
    While installed capacity will reach an estimated 43 million tonnes at
end-2020, the 45 million tonnes ceiling will not be breached next year
because some of the additions involve swapping decommissioned capacity for
new production, Wang said following her presentation.    
    Primary aluminium consumption in China, the world's biggest producer
and user of the metal, is seen rising by 1.7% in 2021. That follows a
projected 1.6% increase in consumption in 2020 - a revision of Antaike's
earlier forecast of a drop in the wake of the coronavirus pandemic.

    "We expect traditional demand will gradually recover and new
infrastructure will bring new consumption," said Wang, cautioning that
China's aluminium exports still face a "severe" situation due to trade
    Antaike also more than doubled its forecast for China's net primary
aluminium imports this year.   
 China's primary aluminium market balance (tonnes)       Source: Antaike
                        2019       2020E      2021E      2021/2020 pct chg
 Production             35.93 mln  37.15 mln  38 mln     2.30%
 Net imports            -10,000    820,000    200,000    N/A
 Total supply           35.93 mln  37.97 mln  38.2 mln   0.60%
 Consumption            36.62 mln  37.2 mln   37.85 mln  1.70%
 Supply-demand balance  -690,000   770,000    350,000    N/A
    Separately, Antaike analyst Huo Yunbo said China would add 6.7 million
tonnes of capacity for aluminium raw material alumina in 2021 and another
4.6 million tonnes in 2022. Current capacity is 88.15 million tonnes.  
 China's alumina market balance (tonnes)      Source: Antaike  
                                 2019      2020E          2021E
 Production                 71.55 mln  70.49 mln       72.9 mln
 Net imports                 1.41 mln    3.5 mln          4 mln
 Total supply               72.96 mln  73.99 mln       76.9 mln
 Total demand volume        71.98 mln  74.53 mln      76.16 mln
 Supply-demand balance        980,000   -540,000        740,000
 (Reporting by Min Zhang and Shivani Singh; writing by Tom Daly
Editing by Robert Birsel)