China Gets Tough in Addressing Overcapacity in Aluminum, Steel and Others

SHANGHAI, Oct. 16 (SMM) – China’s Ministry of Industry & Information Technology (MIIT) released the State Council’s Guidelines on Addressing Severe Overcapacity, involving aluminum, steel, sheet glass, cement and ship-building sectors.

New measures to tackle overcapacity in aluminum industry are shown below:

1. Eliminate prebaked anode cells (＜160,000 Amps) before the end of 2015.

2. Power tariffs shall be raised by 10% for aluminum smelters whose AC power consumption exceeds 13,700 kwh per ton aluminum liquid and whose capacity fails to meet standards before the end of 2015.

3. Local governments are forbidden to introduce preferential electricity price policies. Measures should be taken to relocate aluminum smelters to regions where there is abundant hydro power.

4. Aluminum smelters are encouraged to sign long-term power supply contracts with power plants.

5.  Chinese enterprises are encouraged to build aluminum smelters overseas where energy is rich. 

The MIIT asked rare earth mining, smelting, separation and recycling companies to prepare for declaration of output targets for 2014. 

The state regulator also announced the 2nd batch of enterprises qualified for Entrance Requirement in Magnesium Industry for seeking advice, running from October 11 through October 18. The shortlist includes 12 companies: Shenmu Xingyang Metal Magnesium Co., Fugu Shengxin Magnesium Industry Co., Fugu Tongyuan Magnesium Co., Fugu Jinchuan Magnesium Industry Co., Fugu Fuxing Industry and Trade Co., Fugu Tianyuan Magnesium Co., Fugu Yide Magnesium Alloy Co., Fugu Jinchuan Hongtai Magnesium Alloy Co., Yulin Wanyuan Magnesium Industry Co., Shanxi Xinxing Hongda Magnesium Co., Shanxi Bada Magnesium Co., Regal Magnesium Co.