UC Rusal’s Oleg Mukhamedshin, deputy CEO of UC Rusal, speaking at the 16th ARABAL conference and exhibition in Doha, Qatar, believes that China should either close down or modernise its existing production capacity and focus more strongly on developing a downstream industry.

Mukhamedshin, second in command of one of the largest aluminium producers in the world, says everybody knows that China’s capacity is going up and that this year it has an operating capacity of 27Mt.

According to Mukhamedshin, China’s current situation is driven by two factors: new capacity coming on stream in Western provinces; and an estimated 1Mt of idled capacity coming back on stream as local governments assist producers with power subsidies, payment extensions and financial support.

He said that, despite China’s overall GDP going down, aluminium consumption there should be very sustainable .

China currently accounts for 44% of industrial aluminium capacity and this can only grow, he said.

A downstream focus in China would boost employment, he said.

Turning to the Gulf, Mukhamedshin said it had had grown fast over the past five years with annual growth over the period of 16% and the Gulf’s downstream base experiencing 7% growth.