SHANGHAI, June 25 -- Thirteen aluminum producers in China's Henan province have agreed to cut capacity by 700,000 metric tons starting later this month, state-controlled Xinhua news agency reported Friday.
Since May, a termination of preferential power tariffs and falling aluminum prices have plagued smelters in the country's main galvanized aluminum producing region, leading most aluminum companies to post losses, the report cited Henan Nonferrous Metals Association as saying.
Currently, production cost at galvanized aluminum producers in Henan is almost the same as aluminum sales prices, while some areas have seen production cost outpaced sales prices by CNY2,000 a ton, it said.
Henan has annual galvanized aluminum capacity of 4.65 million tons. Output reached 3.14 million tons last year, and analysts from the nonferrous metals association expect 2010 output to remain the same level as 2009, according to the report.