Reuters reported that Capacity is dividing China's metals producers, with the country's top copper refiner looking for an upturn in a balanced market and the leading aluminium firm hoping things will not get worse. According to the report, Aluminium smelters, like China's steel mills, are suffering from huge overcapacity and now face prices below production costs, forcing many to shut in capacity. Mr Wen Xianjun vice chairman of China Nonferrous Metals Industry Association said "Oversupply and overcapacity in the aluminium industry in China will continue in 2009 and lower international prices of aluminium would open the door to more imports of the metal into China. He said that therefore domestic aluminium prices are not likely to rise in 2009." The scenario by Mr Wang Chiwei, executive director at China's top refiner Jiangxi Copper was starkly different. He said "I am bullish on long-term copper prices. If the economic environment improves investors will select profitable markets to invest in and the copper market is one of them," Mr Wang said China is the world's top producer of copper but still produces less than it needs. Jiangxi Copper plans to lift refined copper output 12% in 2009 to 800,000 tonnes. He said that "That's the difference between copper smelters and other base metals smelters. Aluminium smelters have huge stockpiles and aluminium prices have fallen steeply so the government can buy aluminium at a premium price."

Source