Updates on analysis of impact of 2020-2021 heating season on aluminium and alumina industries

SHANGHAI, Nov 30 (SMM) – Many northern regions have issued output control policies for the 2020-2021 heating season. SMM issued an article on October 31 that analysed the impact of the 2020-2021 heating season on aluminium and alumina industries. The followings are updates on the actual production restrictions.

On November 17, Lvliang in Shanxi province issued the List of Heavy Pollution Weather Emergency Emission Reductions in 2020, which involves 10 alumina plants and one aluminium smelter. The document has set requirements on production and transport at these companies.

Up to now, SMM learned that one alumina plant in Henan has shut down two roasting furnaces, leaving 450,000 mt/year of roasting capacity in operation. Another alumina plant in Henan closed one roasting furnace, leaving 1.8 million mt/year of roasting capacity in operation. One alumina plant in Shanxi is currently operating 1.5 million mt/year of roasting capacity and is likely to reduce operating capacity to 800,000 mt/year in the future. One alumina plant in Shandong closed 3 million mt/year of roasting capacity in the week of November 9-15, but resumed production in the same week.

Three aluminium smelters in Henan, which are categorised as C, did not reduce output and are operating normally.

Production halts at alumina plants mostly target roasting capacity. Alumina supply and demand in north China are largely stable. Aside from output cuts caused by the heating season, market also needs to pay attention to the impact on supply from alumina plants who took the initiative to reduce output.

Profits at aluminium smelters rose to 2,852.3 yuan/mt as of November 27 amid soaring aluminium prices. Aluminium smelters are unlikely to take the initiative to reduce output, given high profits. Besides, rain and snow in winter will also affect transport time and cost.