Metals News
Aluminum Smelters in Henan May Face Power Shortages, CRU Says
industry news

SHANGHAI, Jan. 7 -- Some aluminum smelters in China's Henan province, the largest producer in the nation, received notices from power suppliers to prepare for stoppages, according to CRU International Ltd.

There have been "periodic power supply disruptions" in provinces including Henan and Hunan, though the impact "is not serious" so far, Wan Ling, a Beijing-based analyst, said by phone today. She declined to name the smelters affected.

Shanghai, Chongqing and other regions in China are limiting electricity use as low temperatures increased demand and snowfalls hampered coal deliveries needed to generate power. Aluminum futures in Shanghai rose to the highest level in almost 15 months yesterday on supply concerns.

A cold front in northern China that caused the heaviest snowfall in Beijing in almost six decades and the lowest temperatures since 1971 began moving south yesterday into the provinces of Zhejiang, Jiangxi and Hunan, the China Meteorological Administration said. Snow is forecast for parts of the three provinces today and the following two days, the weather bureau said on its Web site.

China shut 0.5 percent of its power-generating capacity as the snowfalls disrupted coal deliveries. Stockpiles at power plants connected to State Grid Corp. of China's network have fallen 4.3 percent since Dec. 28 to 21.11 million metric tons, enough for up to nine days of consumption, data from the country's dominant grid operator showed.

Chalco Unaffected

Aluminum Corp. of China Ltd., the nation's biggest producer, said yesterday the snowfall "had no impact" on output.

"Our production is normal," Jia Dongyan, secretary of Jiaozuo Wanfang Aluminum Manufacturing Co., a smelter in Henan province, said by phone today. Jiaozuo didn't receive a notification from power suppliers, he said.

Aluminum futures fell 2.2 percent to 17,755 yuan a metric ton at 11:30 a.m. on the Shanghai Futures Exchange today.

In January 2008, China suffered its worst snowstorms in 50 years. The blizzards left millions of travelers stranded during the Lunar New Year holidays and factory closures caused an estimated 111 billion yuan ($16.2 billion) in economic losses.

China shut 7 percent of its coal-fired power generation capacity, or 40,990 megawatts, after deliveries of the fuel were delayed by snowstorms at that time, the official Xinhua News Agency reported then.



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