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Old aluminium plants will be closed down in China in the coming 3 years.
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China will phase out high cost and outdated primary aluminium units in two to three years, an executive at a key producer said. It is a move that should check capacity growth for one of the country's most oversupplied commodities.
The closures should help prices of the metal in the country, its top consumer and producer, recover from a sharp drop of almost 30% in the past four years. Demand and supply in China would be basically in balance in five years or longer.
The government pledged it would cut at least 420,000 tonnes of outdated aluminium capacity this year as part of a program aimed at closing obsolete, inefficient and polluting industrial facilities.
Mr Wang Feihong senior analyst of China Minmetals Non Ferrous Metals said that "Building of new capacity will also slow as heavily indebted local governments cut financial support to loss-making aluminium smelters. Mainland banks cut back on loans and pollution control efforts pick up pace."
Source: Aluplanet
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