Any Impact on Domestic Secondary Aluminum Alloy Producers after New Environmental Drive? SMM Reports

SHANGHAI, Dec. 12 (SMM) – The second round of 7 environmental protection inspection teams arrived in seven regions from November 24 to 30 to supervise environmental protection work, including Beijing, Shanghai, Guangdong, Hubei, Chongqing, Shaanxi and Gansu.

What’s happened at secondary aluminum alloy producers after the inspections, and SMM survey finds the following insights.

Will New Environmental Protection Inspections Trigger Massive Cuts in China Metals Producers? SMM Reports

Chongqing: It is learned that environmental protection inspection teams arrived at Chongqing on November 24 and the inspection will continue for one month. Chongqing’s government already launched inspections one month ago. One of four large secondary aluminum alloy producers in Chongqing cut output for one week during the previous round of inspections, reducing monthly capacity by 3,000 tonnes. The inspections made small impact on other large producers, and SMEs producers were negatively affected to some extent. The checks, combined with insufficient supplies, buoyed up secondary aluminum alloy price in Chongqing’s market, which was briefly flat with price in east China’s market.

Environmental protection inspection teams arrived at Chongqing on November 24 and will have one month-long inspections, which will be carried out by district, and the inspection team is now in Chongqing’s Qijiang District.

A manager of one large secondary aluminum alloy producer in Chongqing told SMM that the company already suspended smelting operations which caused severe pollution, and only only produce primary aluminum alloy. The company will deliver secondary aluminum alloy with inventory on hand and stop receiving new orders. This will lead to a 1/3 decline in secondary aluminum alloy output in the company. Most local producers have chose to cut output to get through the one month-long checks. Most small and medium producers have been required to halt production in the region.

Guangdong: Environmental protection inspections were launched in Guangdong in November, which had been carried out strictly. Unqualified producers were fined and required to shut down, and people in charge were held for responsibilities. One large secondary aluminum alloy producers suspended operation for selling aluminum dross, reported by downstream small enterprises, SMM learns. Most small secondary aluminum alloy producers in Guangdong, failing to pass environmental protection inspections, shut down and large producers, passing the inspections, kept normal operations. One manager of large secondary aluminum alloy producer told SMM aluminum that inspections in Foshan, Qingyuan and Zhaoqing, already under tough environmental check, are very strict.  

Jiangsu, Zhejiang and Shanghai: Secondary aluminum alloy producers in Jiangsu, Zhejiang and Shanghai got through the inspections. Some small producers in those areas already resumed operations, who suspended output for a month due to environmental inspections. Large producers, meeting standards, produce normally.     

Hebei: Environmental protection inspections have been launched in Hebei since September and remain strict till now. One mid secondary aluminum alloy producer in Dacheng said that coal-fired producers were called to shut down. Baoding and Handan is undergoing strict environmental inspections. Middle-size producers in Baoding suffer limited impact and are allowed to keep producing if passing the inspections.

Other regions: One small secondary aluminum alloy producer in Datong County, Qinghai Province, has suspended output for 10 days and remains offline now, a reflection of stricter environmental protection inspections in Qinghai.

As a whole, domestic secondary aluminum production has been limited affected by the inspections, as most of secondary aluminum capacities are in large producers, which generally meet environmental standards after huge investment in the aspect. Small and medium producers, however, have suffered some impact from environmental crackdowns. Some small producers in the remote area and less strict inspections suspend output in daytime but start operation at night.

Overall, the domestic secondary aluminum industry suffers more from panic after stringent environmental protection inspections and responsibilities, SMM says.  

For news cooperation, please contact us by email: sallyzhang@smm.cn orservice.en@smm.cn.