BEIJING (Reuters) - China’s non-ferrous metal output fell to a one-year low in August, in a sign that Beijing’s environmental crackdown is curbing supplies of base metals, with aluminum also hit by efforts to rein in output.
Production of 10 nonferrous metals - including copper, aluminum, lead, zinc and nickel - fell 2.2 percent to 4.42 million tonnes, official data showed on Thursday, the lowest in a year and the first year-on-year drop since December 2015.
“I think it is definitely related to the crackdown on production that will pollute the environment,” said Helen Lau, an analyst at Argonaut Securities in Hong Kong.
The impact of China’s environmental protection campaign was also evident in weak industrial production growth, she said.
China has launched an aggressive campaign to curb choking smog in its northern regions, promising to close more factories and enforce bigger emission cuts in coming months, along with random spot checks to ensure targets are met.
Smelters of copper and other nonferrous metals have faced closures because of the crackdown. Lead has been particularly hard hit, with 80 percent of illegal secondary smelters shut down since the second half of last year, according to research group Antaike.
China’s primary aluminum production fell for a second successive month in August to its lowest level since April 2016, as the government’s effort to curb excess smelting capacity starts to bring results.
Aluminum output fell 3.7 percent year on year to 2.64 million tonnes last month, and was down nearly two percent on July, the data from China’s National Bureau of Statistics showed. The government will release a breakdown of the other individual metals later this month.
August was the first month after Shandong-based smelters China Hongqiao, the world’s top aluminum producer, and Xinfa Group were forced to shut a combined 3.2 million tonnes per year of illegal capacity.
More cuts could follow, said Jackie Wang, an aluminum consultant at CRU in Beijing.
“We do think aluminum production will go slightly down going forward,” she said. “Because of the supply-side reform cuts and upcoming winter cuts, we expect to see a bit of a deficit in Q4 in China.”
In the first eight months of the year, China produced 22.17 million tonnes of aluminum, up 6.1 percent from the same period last year.
January-August nonferrous production was up 4.9 percent at 36.4 million tonnes. The other non-ferrous metals are tin, antimony, mercury, magnesium and titanium.
Reporting by Tom Daly; Editing by Richard Pullin