Demand for aluminum in China seen to top expectations due to electric vehicles

Article by Andrew Christian, on October 23, 2014

The demand for aluminum in China could be greater than expected as the country pursue electric vehicles, remarked to Novelis Inc. China is requiring that at least 30 percent of new government vehicles be powered by alternative energy by 2016 as the government tries to cut pollution while reducing its energy dependence.

Shashi Maudgal, president of Novelis Asia, told Bloomberg in an interview that the use of aluminum in auto bodies by China, Japan and South Korea is estimated at around 50,000 metric tons.

That figure is expect to surge by around 30 percent annually for at least the next decade, he said. He quipped that once China pursues in EV target, the gain should top 30 percent.

Novelis recently opened auto body sheet site in the Changzhou, China that could handle 120,000 tons of aluminum annually. The site has either supply contracts or is in advanced supply talks with carmakers like Chery Jaguar Land Rover Automotive Company Ltd. and SAIC Motor Corp. Ltd.

The Chinese government has leveled up its “war” against smog levels reached hazardous levels in Beijing last winter. To partly address the pollution problem, China is pursuing the adoption of EVs and transforming it into a strategic industry through it can gain global leadership, cut energy dependence and emissions.

"China may surprise us by growing faster than anyone else," Maudgal said. Novelis new site in China uses aluminum coil from its plant in South Korea. Its products will be sold to customers in Asia, Europe and the United States. Maudgal disclosed that China will account for around 15 percent of the company’s Asian production.

He quipped that aluminum use in car bodies is “taking off now” due environmental concerns that have become extremely important. Novelis Vice Chairman Debnarayan Bhattacharya said in August that automotive aluminum shipments may surge by up to 25 percent of total sales by the end of the decade.

Topics: china, electric car

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