China's Xinheng Starts up 650,000 mt/yr Recycled Aluminum Plant

Hong Kong, July 10 -- Chinese aluminum trading company Beijing Xinheng Group started operations at a new 650,000 mt/year recycled aluminum plant in Xining, Qinghai province, mid-June, a company official said Thursday.
    
    The Yuan 8.6 billion ($1.26 billion) plant, a joint venture between Xinheng and the Aluminum Corporation of China or Chinalco, is forecast to generate revenue of Yuan 9.7 billion/year and profit of Yuan 800 million/year.

    Xinheng declined to disclose its output target for the first year or speculate on what impact tight global aluminum scrap supply would have.
    
    Local media have reported that the plant would have to import aluminum scrap for recycling. However, the global economic slowdown has reduced supply from the dismantling sector worldwide.
   
    A source at Minmetals predicted China's recycled aluminum output in 2009 would fall below 2008 levels as a result.
     
    "Also China's customs has tightened aluminum scrap import controls since early 2009 on environmental grounds. This, plus weak refined aluminum prices, will trim recycled aluminum output this year," the source said.
    
    Chines aluminum scrap importers are required to pay pre-import inspection fees of $150/ticket and post-import inspection fees of $30-50/mt.
     
    Chinese domestic refined aluminum price stood at Yuan 13,615/mt ($1,993/mt) Thursday, down Yuan 30 from Wednesday. The price averaged Yuan 19,000/mt in 2008.
    
    China imported 683,843 mt aluminum scrap over January-May this year, down 24% year on year, customs figures showed. In full-year 2008, the country imported 2.15 million mt, up 3% from 2007, while recycled aluminum output in 2008 totaled 2.7 million mt, down 1.8% year on year.

    (Source: Platts)