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China Shandong Details Aluminum Sector Winter Output Cuts

Shandong Province, North China, released a detailed list of alumina and aluminum producers intending to cut their output in the winter heating season from November 15, 2017, to March, 15, 2018...

From: platts.comDate: 2017-12-04 02:19:10Views: 319

Shandong Province, North China, released a detailed list of alumina and aluminum producers intending to cut their output in the winter heating season from November 15, 2017, to March, 15, 2018, the Shandong branch of the Ministry of Environmental Protection (MEP) said in a circular Friday.

Xinfa Group, with a 1.58 million mt/year unalloyed aluminum ingot and rod output capacity in Liaocheng City, Shandong, would shut 30%, or 564 electrolytic cells, out of its 1,880 cells in winter, equal to 381,900 mt/year of output capacity, MEP data showed.

Xinfa Huayu Alumina in Chiping County, Shandong, with an alumina output capacity of 7 million mt/year, will shut four of its 11 production lines in winter, equal to 2.6 million mt/year capacity.

Meanwhile, in Zhanhua District, Binzhou City, Shandong, 320,000 mt/year refined aluminum producer Binbei New Material will shut all its 240 electrolytic cells in winter from November 15, 2017, to March 1, 2018, with the No.1 production line of its first phase alumina plant and the No.1 line of its second phase alumina plant asked to shut in winter, data from the Binzhou city government showed.

In Wudi County, under Binzhou Administration, 500,000 mt/year alumina producer Wudi Qixing Hi-tech Aluminum will shut all its output capacity in winter, while in Binzhou, Beihai Huihong New Aluminum Profiles with refined aluminum output capacity of 600,000 mt/year was asked to shut half of its 444 electrolytic cells, data showed.

In Zouping County, Shandong, alumina producers -- 4 million mt/year Weiqiao Aluminum & Power and 4 million mt/year Gaoxin Aluminum & Power -- were asked to cut a total alumina output capacity of 2.5 million mt/year in winter, city government data showed.

During winter, Weiqiao Aluminum & Power was asked to shut 1,484 of its 3,924 electrolytic cells -- the plant has aggregate aluminum smelting capacity of 4.25 million mt/year, its data showed.

Binzhou City requires the aluminum sector to cut output by 30% and the alumina sector -- referring to alumina plants using bauxite for processing, excluding alumina new materials and alumina grinding balls -- to cut output by over 30% in the winter heating period, its data showed.


Meanwhile, despite the start of output cuts by the Chinese aluminum sector since mid-November, Chinese domestic aluminum prices were weaker over the past few weeks, data from Shanghai Futures Exchange showed.

SHFE's most active 1801 aluminum futures contract prices over Wednesday to Friday were much less than Yuan 16,235/mt ($2,435) November 1, with the Friday price closing at Yuan 14,600/mt, up from Yuan 14,565/mt Thursday, SHFE data showed.

A spokesman for Hongqiao Group, which has aluminum bases in Zouping, Weiqiao, Binzhou and Huimin, told Platts the output cuts were not the only factor affecting prices in the sector.

Analysts have predicted Chinese aluminum prices will stay weak during the first half of 2018 due to high domestic stocks, turning stronger in H2, but the Hongqiao spokesman said it was still too early to predict next year's prices as the impact of the output were yet to be seen.

"Market participants are skeptical of the impact of the output cuts on the market, with prices being affected by speculative activities," he said.

China's social aluminum stock volume (stocks at producers, processing plants, traders, SHFE's warehouses, and cargoes in transit) is expected to reach 2.2 million mt before the Lunar Chinese New Year (mid-February 2018), up about 500,000 mt from current levels, data from State Development & Investment Corp. showed.


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