China produced 1.77 million tons of alumina in the first two months of 2006, up 44 percent year on year, due partly to the heavy domestic demand, according to the National Bureau of Statistics.

In February alone, the output of alumina, or aluminum oxide jumped by 48.3 percent to 881,700 tons.

Despite the growth in alumina production in the two months, Chinese enterprises had to import alumina at a record high price of 650 U.S. dollars per ton, indicating a strong market demand in the country, according market observers.

Alumina is the main material used by aluminum smelters to produce the light weight metal aluminum for making soda pop cans, light bulbs and many other consumer products.

According to the National Development and Reform Commission, China produced 8.51 million tons of alumina last year, up 21.9 percent year on year. But it also had to import 7 million tons of alumina, a 19.4 percent rise from a year earlier, to meet the ballooning domestic demand.

Industry insiders predicted that global supply of alumina will exceed demand. Morgan Stanley forecast the global alumina price will drop as the market will be oversupplied by about 378,000 tons this year.

Source: Xinhua