Commissioning of new aluminium capacity to slow down in H2 on low prices

SHANGHAI, Jul 2 (SMM) – The commissioning of China’s new aluminium capacity in the second half of this year is likely to fall short of what was planned if prices remain weak, SMM expects.

A total of 1.29 million mt of new aluminium capacity was commissioned in the first six months of this year, while a total of 2.36 million mt is planned to be commissioned in the next six months, SMM research showed.

At 3.65 million mt for 2018, this would be 500,000 mt less than the estimate made at the beginning of the year.

However, we may see only 1.5-2 million mt of capacity being commissioned in the second half of the year due to low aluminium prices.  

High electricity costs also jeopardised the willingness of aluminium producers to commission new capacities. As the government intensifies its efforts in regulating captive power plants, the construction of captive power plants at aluminium producers slows down as well.