Aluminium processors in Henan affected by intensified curbs on Chinese Ethnic Games

SHANGHAI, Sep 9 (SMM) – Casting and processing operation across aluminium rod, coil, plate producers in Gongyi, Jiaozuo, and Zhengzhou cities of Henan province have been affected to varying degrees since September 4, as local government tightened environmental curbs to prepare for the 11th Chinese Ethnic Games, which is held in Zhengzhou during September 8-16.

The latest SMM survey indicates that the actual impact of the output controls could be temporary, for about 10 days. 

SMM learned that large logistics vehicles have been banned from entering Zhengzhou and checks against vehicle overloading tightened since August 25, ahead of the Chinese Ethnic Games. 

In Huiguo county of Gongyi, production that involves volatile organic compound (VOCs) emissions, including the manufacturing of aluminium cold-rolled coil, wire, cables, and plastic products, was ordered to suspend during September 4-17. Local industrial enterprises failed to complete environmental rectifications should all shut down during the same period. 

Aluminiumrod producers in Jiaozuo were required to halve production from September 6, and producers of aluminium plate, strip in Yingyang should stop casting operation. 

Suspension of casting drove aluminium processors in Henan to procure feedstock cast-rolling coil from other areas like Inner Mongolia, Xinjiang, and Qinghai. This buoyed prices of #1 series cast-rolling coil in Henan from 550 yuan/mt at the end of August to 600 yuan/mt as of Friday September 6, SMM learned. 

While some expected higher costs of raw materials to lift prices of aluminium plate and strip in Henan, local producers showed limited inclination to raise offers given poor downstream orders since August.