China Update

China Update

17th August 2006

Glencore - the world's largest private trader in metals (and the key shareholder in Xstrata) - has signed a deal which admits it to part-ownership of China's largest aluminium smetrer, Qingtongxia, operated by Chalco.

In 2005, the country used nearly 7 million tonnes of aluminium - making it the largest consumer in the world. Meanwhile the regime is still striving to limit "unregulated" production by banning smelters with a capacity of under 3000 tonnes a year.

The administration is also seeking to "pull down" steel demand, in an attempt to prevent a fall in domestic prices as foreign customers react against being swamped by exports.

China is the source of no less than 60% of the global total of coking coal, with production capacity growing "too fast" according to an industry spokesperson. But, while exports fell by around 10% last month, domestic demand was up by over 15%.

The regime's attempt to reduce industrial pollution - especially sulphur dioxide from coal burning - is failing, re-iterates the country's leading environmental czar in yet another statement. [Interfax China news, August 5 - August 11 2006].

And another coal mine disaster has claimed the lives of eighteen workers.