China plans to supply aluminum to Boeing

China's emergence as the world's largest aluminum producer has shaken the industry, forcing competitors to close factories as profits plummeted. Alcoa Inc., the leading US manufacturer for over a century, is closing aluminum smelters and plans to split in two. At the same time, other companies are beginning to experience difficulties, and the acquisition by a Chinese businessman of Aleris Corp will probably lead to their complete collapse.

After China has taken a dominant position in the raw aluminum market, the country wants to expand its ability to produce higher value-added products. The biggest step in this direction is the announced $ 2.3 billion acquisition of Cleveland Aleris Corp last week by Chinese aluminum entrepreneur Liu Zhongtian. The deal gives the founder of China's largest extruded aluminum producer greater access to American and European technology, and will also gain buyers that include aerospace manufacturers such as Boeing Co. and automakers such as Audi.

Liu's actions follow decades of sweeping changes in the industry. When he founded China Zhongwang Holdings Ltd. in 1993, the country provided less than 10 percent of the world's primary aluminum production, and now produces 55 percent. The exit eclipsed domestic consumption, spawning a flood of cheap exports, exacerbating global surplus amid stagnant demand. Prices this year, on average, are the lowest since 2003 on the London Metal Exchange.

Currently, Liu is expanding his business in metal processing, not in its production, and he is not the only one who bets on this market. Many Chinese factories continue to expand their capabilities, expanding the number and capabilities of rolling mills.

China's exports of flat products last year accounted for about 7 percent of global demand and will grow further, according to the forecast of London-based CRU Group. The country produced more than 60 percent of the world's aluminum foil in 2015 and last year became the first exporter of specialized aluminum sheets used to make beverage cans.