Alumina Capacity Cuts Have Totalled 15.02 Million mt in Shanxi, Shandong and Henan

SHANGHAI, Feb 8 (SMM) - The alumina refineries in Shanxi, Shandong and Henan mostly experienced production cuts or suspensions due to environmental protection policies, which have totalled 15.02 million mt/year for the moment.

Specifically speaking, the production cuts in Shandong fell short of expectation, while that in Shanxi and Henan far exceeded estimate. Among them, most refineries in Jinzhong and Lvliang in Shanxi suspended or reduced roasting capacities, with a combined capacity of 5.95 million mt. In Zhenzhou, Jiaozuo, Sanmenxia and Luoyang in Henan, the alumina refineries have collectively reduced the operating capacities by 4.67 million mt. The alumina refineries in Binzhou and Zibo in Shandong were more greatly affected with their roasting capacities, with operating capacities falling by 4.4 million mt.

Nonetheless, there were still refineries operating normally in these three provinces due to the differences in local production cut policies, according to SMM survey. Some refineries said that they are allowed to resume the production when the weather turns better, while others say the production restrictions will be in place until late February or even mid-March.

For aluminium smelters, they mostly consumed the in-plant inventories during the CNY holiday, and some currently have a stock that could sustain the production for 7-10 days. The current production restrictions in Shanxi, Shandong and Henna will reduce the daily alumina supply by 41,200 mt, which seriously limits the supply under long-term orders. As such, the market becomes more and more concerned about the supply shortage, and aluminium smelters are eager to build stocks, which will further raise alumina prices.