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Aluminum Capacity in Some Regions to Resume Operations
Feb 28,2011 14:22CST
smm insight

SHANGHAI, Feb. 28 (SMM) -- China’s aluminum output has been falling since July 2010, with the output hitting a low in November 2010. Aluminum output in Henan province has accounted for approximately 25% of China’s total output since 2007, but almost 30% of aluminum capacity in Henan province was suspended during 4Q 2010 due to energy conservation and emission reduction policies, causing the proportion of Henan’s aluminum output in China’s total output to fall to 20%. However, approximately 400 kt/yr aluminum capacity in this region will resume operations in March.

SMM believes local aluminum producers in Henan province have been restarting operations following the Chinese New Year holiday since electricity restrictions have been easing.  Idled aluminum producers in Guangxi province have also been restarting production since January and operations have now returned to normal. New capacity in northwest China has also now come online, with rising alumina prices a sign of higher operating rates at China’s aluminum producers. However, SMM predicts China’s aluminum output will not show an increase on a monthly basis until March, since any increases in aluminum output lag behind the commissioning of electrolytic cells, while the fewer number of production days in February will also affect actual aluminum output.   


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