February 1, 2019 / 10:07 AM / 6 months ago

UPDATE 1-China Hongqiao restarts aluminium output as some winter curbs end

* Hongqiao to resume production from units shut until Jan. 31

* Says will take around four months to ramp up

* Some 100,000 T of company’s output affected by winter cuts (Adds background)

By Tom Daly

BEIJING, Feb 1 (Reuters) - China Hongqiao Group, the world’s top aluminium smelter, said on Friday it would gradually restart production from some of its pots after the expiration of some government-mandated output curbs on Jan. 31.

The restarts come as Chinese aluminium prices are struggling to rise from two-year lows amid lacklustre domestic demand and other smelters are cutting production to avoid financial losses.

Hongqiao will resume output on the smelting units, known as potlines or pots, at its plants in the city of Binzhou in eastern China’s Shandong province and it will take until June to reach full production, the company said in a statement to Reuters.

Hongqiao cut production in Binzhou after the provincial government ordered industrial companies to curb output to reduce air pollution during the winter. Some of Hongqiao’s production was covered under restrictions running from mid-November to mid-March, the peak winter heating season in China, but other curbs ran only from Dec. 1 to Jan. 31.

Around 100,000 tonnes of actual aluminium production was affected by the winter cuts, said Hongqiao, which has 6.46 million tonnes per year of operational capacity.

Analysts had earlier estimated Hongqiao would have to cut up to 550,000 tonnes of annual production — equal to around 183,300 tonnes of output in four months — during the winter, based on a plan issued by the Binzhou government in November.

Aluminium prices on the Shanghai Futures Exchange rose 0.3 percent to 13,545 yuan ($2,009.76) a tonne on Friday. The exchange will be closed until Feb. 11 for the Lunar New Year holiday.

Hongqiao’s state-run rival, Aluminum Corp of China Ltd , said late on Wednesday it was shutting a 200,000-tonnes-per-year smelter in Shandong due to rising electricity prices. ($1 = 6.7396 Chinese yuan renminbi) (Reporting by Tom Daly; editing by Christian Schmollinger)

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