Will Recent Maintenance Reverse Alumina Supply & Demand Picture? SMM Reports-Shanghai Metals Market

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Will Recent Maintenance Reverse Alumina Supply & Demand Picture? SMM Reports

Industry News 03:02:58PM May 04, 2017 Source:SMM

SHANGHAI, May 4 (SMM) – Two alumina producers in Shanxi recently entered maintenance. What triggered this move? Will this have big impact on alumina output and prices?

Shanxi East Hope Jinzhong Aluminum put 1 million-tpy alumina line under maintenance last week, affecting output by 14,000 tonnes. 

Tianyuan Chemical, in Shanxi’s Xiaoyi, which has four alumina production lines with total capacity at 300,000 tonnes, began putting three lines under care by turns from May 1. The maintenance will last 15 days at most. This will affect output by 3,000 tonnes. The rest line is scheduled to enter maintenance this autumn.  

Southwest China to See Concentrated Release of New and Restarted Aluminum Capacity, SMM Says  

Two factors were behind the maintenance, SMM learned. 

1) Environmental Protection Checks

The central environmental protection inspection teams began checks in seven provinces from April 24, of which Shanxi and Guizhou are important alumina producing regions. 

SMM survey found no alumina producers in Guizhou have cut production or entered maintenance, except Huajin Aluminum. This company is putting coal gas furnace under maintenance, but will step up production in the future to compensate for recent production loss. 

2) Alumina Prices Fall to Mid and Lower End of Cost Curve

Alumina prices entered a downward track after the 2017 Chinese New Year holiday, which took place in late January, down from 3,000 yuan/tonne to 2,300 yuan/tonne. As of May 3, alumina prices in Guangxi slumped below 2,300 yuan/tonne to 2,270 yuan/tonne.
Bauxite and caustic soda prices kept rising due to environmental factor, greatly adding to alumina costs. Currently, full costs are 2,400-2,500 yuan/tonne for small alumina producers, versus 2,200-2,300 yuan/tonne for large producers. SMM learned that rising costs and falling prices have left all small alumina producers struggling in losses. 

Macquarie Raises 2017 Aluminum Price Forecast 

In mid-April, Shanxi Xiaoyi Taixing Aluminum Magnesium shifted from 100,000-tpy alumina capacity into aluminum hydroxide production against losses.  

Recent maintenance has limited impact on alumina output, SMM found. However, more producers are expected to conduct maintenance if alumina prices keep falling, which will reverse supply & demand dynamics and put a floor under alumina prices, SMM understood. 

For news cooperation, please contact us by email: sallyzhang@smm.cn or service.en@smm.cn.
 

Key Words:  Alumina prices 

Will Recent Maintenance Reverse Alumina Supply & Demand Picture? SMM Reports

Industry News 03:02:58PM May 04, 2017 Source:SMM

SHANGHAI, May 4 (SMM) – Two alumina producers in Shanxi recently entered maintenance. What triggered this move? Will this have big impact on alumina output and prices?

Shanxi East Hope Jinzhong Aluminum put 1 million-tpy alumina line under maintenance last week, affecting output by 14,000 tonnes. 

Tianyuan Chemical, in Shanxi’s Xiaoyi, which has four alumina production lines with total capacity at 300,000 tonnes, began putting three lines under care by turns from May 1. The maintenance will last 15 days at most. This will affect output by 3,000 tonnes. The rest line is scheduled to enter maintenance this autumn.  

Southwest China to See Concentrated Release of New and Restarted Aluminum Capacity, SMM Says  

Two factors were behind the maintenance, SMM learned. 

1) Environmental Protection Checks

The central environmental protection inspection teams began checks in seven provinces from April 24, of which Shanxi and Guizhou are important alumina producing regions. 

SMM survey found no alumina producers in Guizhou have cut production or entered maintenance, except Huajin Aluminum. This company is putting coal gas furnace under maintenance, but will step up production in the future to compensate for recent production loss. 

2) Alumina Prices Fall to Mid and Lower End of Cost Curve

Alumina prices entered a downward track after the 2017 Chinese New Year holiday, which took place in late January, down from 3,000 yuan/tonne to 2,300 yuan/tonne. As of May 3, alumina prices in Guangxi slumped below 2,300 yuan/tonne to 2,270 yuan/tonne.
Bauxite and caustic soda prices kept rising due to environmental factor, greatly adding to alumina costs. Currently, full costs are 2,400-2,500 yuan/tonne for small alumina producers, versus 2,200-2,300 yuan/tonne for large producers. SMM learned that rising costs and falling prices have left all small alumina producers struggling in losses. 

Macquarie Raises 2017 Aluminum Price Forecast 

In mid-April, Shanxi Xiaoyi Taixing Aluminum Magnesium shifted from 100,000-tpy alumina capacity into aluminum hydroxide production against losses.  

Recent maintenance has limited impact on alumina output, SMM found. However, more producers are expected to conduct maintenance if alumina prices keep falling, which will reverse supply & demand dynamics and put a floor under alumina prices, SMM understood. 

For news cooperation, please contact us by email: sallyzhang@smm.cn or service.en@smm.cn.
 

Key Words:  Alumina prices