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By Zhang Junkuo, Zhao Changwen, and Jia Tao, DRC Enterprise Research Institute

Report No 33, 2014

Abstract:

Although China's electrolytic aluminum industry has a serious overcapacity and industry benefits have fallen significantly, productivity is increasing rapidly and, with the new capacity, industrial overcapacity will become a greater problem. Many things contribute to the overcapacity, including technology, the economy, and the institution, with the institution effect being the one that is especially bad.

Local governments and enterprises have tried somewhat to cut electrolytic aluminum overcapacity, but they are confronted with difficulties in cutting capacity, merging, reorganization, and productivity controls. Therefore, the industry itself should make an effort to follow policies, based on the State Council's idea of cutting excess productivity, and reduce supply and expand demand, to reach the goal of less electrolytic aluminum overcapacity.