SHANGHAI, Jun. 30 (SMM) – Market has been worried that aluminum production will be affected significantly during the winter heating season.
However, SMM considers such concerns as overdone.
Once closed, aluminum capacity will not easily be restarted since it costs more than 750 yuan/tonne to restart. As such, production controls may not be implemented as strictly as required, SMM understands.
The aluminum capacity required to be cut during winter heating season does not necessarily have to be legal capacity, a source from the China Non-Ferrous Metals Industry Association (CNIA), said. Aluminum smelters could negotiate with environmental protection department to deduct illegal capacity already eliminated from the amount of capacity ordered to be cut during winter heating season, the source added.
According to a work plan jointly issued by several departments under the State Council, aluminum smelters covered by the “2+26” key regions for environmental protection (namely Beijing, Tianjin, and 26 smaller cities in the Beijing-Tianjin-Hebei region and nearby areas) are required to slash capacity by more than 30% based on the number of electrolytic cells.
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