Power Shortages in Shandong Province Dampen NPI Production, Aluminum Output Normal

SHANGHAI, Aug.8 (CBI China) -- According to official statistics, power shortages in China will reach 16 million kilowatts during the summer of 2008, with the following two factors largely to blame. First, continuous high temperatures in south China led to the high power consumption.  Second, supplies of coal for power generation have been tightening.

    Sources report the power shortages will reach 10,220 thousand kilowatts in Shandong province, accounting for 1/3 of total demand in the province.  The province power shortages are the largest in the past 10 years.

    Shandong province is a major producer in China of refined aluminum and nickel pig iron, and NPI production will be greatly affected by power shortages. According to CBI's survey, there are 22 NPI producers in the province, and the majority of producers with furnaces halted production during the first half of 2008 due to soaring coking coal prices. Currently, only seven NPI producers remained online, including three producers with arc furnaces, and four producers with furnaces. When power supplies were normal, the seven NPI producers were only running at 20-30% during 1H08 due to market conditions, and now production at a small number of these have now been affected by frequent power outages. Specific production losses will be reported in the next survey. 

    Output of refined aluminum in Shandong province accounted for 30% of China's total.  A large number of local aluminum smelters with their own power plants were running normally, with the exception of China Aluminum Industry Shandong Branch Company, whose electrolytic bath was shut down due to low power supply.