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China’s growing use of aluminium beverage cans

Metal News - Published on Wed, 06 Dec 2017

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Business Live reported that switch by China’s packaging firms to favour aluminium cans for beer and soft drinks is among key drivers that will underpin continued demand growth for the lightweight metal. Mr Alf Barrios CEO of Rio’s aluminium unit in an interview that world’s second-biggest miner, which generates more than a quarter of its revenue from the metal said that we also sees demand being boosted by the forecast rise of electric vehicles and the push by manufacturers to produce lighter cars to reduce emissions.

Mr Barrios said that "In the packaging sector, especially around soft drinks and beer in China, we’re seeing a shift from glass to aluminium."

Mr Barrios said that London-based Rio forecasts aluminium demand to rise about 4% a year for the next five years, and is yet to factor in the likely additional benefits that will flow from the adoption of electric vehicles, which typically use more of the metal than conventional vehicles.

Chinese beer makers, including Tsingtao Brewery, rose on Monday after both UBS and Goldman Sachs issued reports saying they expected industry-wide price hikes. UBS estimates 28% annual profit growth for the sector from 2018 to 2020 as demand recovers.

Global consumption of refined aluminium is likely to have annual growth of 3%-4% in 2018 and 2019, while China’s curbs to supply will act "as a long-term game changer", spurring price gains to incentivise the addition of new capacity elsewhere, according to Citigroup.

Mr Barrios said in the interview that supply cuts under antipollution efforts and industry reform in China means "the rest of the world, where demand is also growing, will have to supply itself with aluminium in future." He continued that "Until now, the thinking was that China would be a net exporter, and all that growth would come from China, that’s where the change is, that view is now different."

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Posted By : Rabi Wangkhem on Wed, 06 Dec 2017
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