orable expectation of the aluminum capacity limitation, relief of the domestic liquidity crisis, and the rise of overseas risk preference. However, in the long run, the problem of the surplus capacityIn July, aluminum price had a temporary rebounce under the fav of the industry is not that simple as we want it, where people enlarge scale of production within the lower cost region in the west, while shutting down or lessening output of the exsiting factories in the east, under the pressure of “make sure of the growth”, might not be quite practical at the moment. Besides, as the price rises, shut-down machines might be put into use again, and the demands from the fabricating factories are still weak, making a demand-motivated price rise very unlikely.

　　Hope to limit capacity likely to vanish once again.

　　Recently, the State Council proposes to support the adjustment of the surplus capacity, and offers designated loans for acquisition, and strictly forbids increasing loan credits for constructions of the industry which are already surplus in capacity. At the same time, the China Nonferrous Metal Industry Association has a negociation with the top 15 aluminum companies, and has an initial agreement to lessen 1 million tons of production. And the ACC, Yunnan Aluminum, Xinheng, and Zhongfu successively announced that they would reduce production by 700,000 tons.

　　However, the investment in aluminum has never been ceased. In a few months, there will be over 1 million tons of capacity putting into use in the regions of Chongqing, Shanxi, Gansu and Xinjiang. And the aluminum supply for the second half year will seem to be as normal as usual.

　　Besides, the rebounce of aluminum price draws back the ceased Electrolyzer into use again, making it impossible to keep the price up or reduce deficit.

　　Aluminum fabricating industry facing threats

　　The unstoppable excessive production from the upper-stream of the chain deteriorates the fabricating enterprises in the lower-stream.

　　Numerous fabricating enterprises share the common characteristics such as small scale, low condensity, which means, on the other hand, that there aren’t any sophisticated fabricating company groups. As the statisitic shows, there are more than 1400 aluminum fabricating companies in China, including about 780 profiles companies and 650 plates and sheets companies. However, companies of big or medium size count less than 20%, and averagely, each company only produces about 25 thousand tons of aluminum, and the biggest company, the Southern-west Aluminum, produces about 800 thousand tons annually. What we know is that among the developed countries, the average production each year is over 100 thousand tons, and the biggest one produces 1.7 million tons annually.

　　Generally speaking, the total technique and creativity of the China aluminum fabricating companies is comparatively weaker, which weakens the foreign trading competitiveness. Though some companies are able to have some R&D, based on the techniques and experiences aborbed from the foreign companies, or even at some specific aspects, they are technically in the same or almost the same level with the advanced companies worldwide, most of the companies still find themselves in the production level of th 90s, constricted by the social form, market system, limited money and technique, feeling unable to reform.

　　The overseas market of packaging foil has become more and more difficult, even people place so much expectation on it. In the China International Aluminum Industry exhibition and the Shanghai International Industrial materials exhibition, companies manufacturing or fabricating foils believed that the export of foils will be more difficult in the future. As reported, in 2012, the total foil capacity is 3.5 million tons, and 77% of that is used to produce 2.7 million tons of foils, and 1.85 million tons are consumed domestically, leaving 850 thousand tons waiting to be sold. Added with the situations that aluminum price in China is higher than that outside, and RMB is rising, and anti-dumping cases are getting more, and the refunds to exporting might be ceased or lessened, the foiling companies are going to suffer in their foreign trading business.