Reuters logo
UPDATE 2-Key Chinese aluminium city to shut 2.57 mln T of capacity for winter
October 13, 2017 / 10:38 AM / in 8 days

UPDATE 2-Key Chinese aluminium city to shut 2.57 mln T of capacity for winter

* Binzhou city orders 2,500 pots closed at 13 smelters Nov-Mar

* Some of capacity ordered closed already shut - analyst

* Binzhou one of 28 cities told to restrict industrial output (Adds names of other firms affected, graphite and alumina detail)

By Tom Daly

BEIJING, Oct 13 (Reuters) - The Chinese city of Binzhou, home to top global aluminium maker China Hongqiao Group , has ordered 2.57 million tonnes of annual smelting capacity to be closed this winter, according to Reuters calculations based on a government document.

The document, whose authenticity was confirmed by a Binzhou official, outlined more than 2,500 pot closures at 13 smelters from Nov. 15, 2017 to March 15, 2018, the main winter heating season in northern China.

Binzhou is one of the 28 northern Chinese cities that the Ministry of Environment Protection has been pressuring to restrict industrial output this winter to avoid choking smog.

Based on the capacity of the pots to be closed, Reuters calculations put the overall annual capacity to be shut at nearly 2.6 million tonnes, or 34.7 percent of the 7.41 million tonnes of capacity listed in the document.

Over the four-month heating season, 2.57 million tonnes per year equates to roughly 857,000 tonnes of aluminium output.

However, some of the 2.57 million tonnes may have been already closed as part of a clampdown on illegal smelting.

It was unclear how many of the smelters belonged to Hongqiao, which did not immediately respond to a request for comment.

Six of those listed carried the name of Hongqiao’s subsidiary, Shandong Weiqiao, and required some 1.36 million tonnes of closures, according to Reuters calculations.

Other smelters listed included Huimin New Material and Zouping Aluminium.

The document also stipulated cutbacks at five graphite plants, which must reduce production by 50 percent over the four months, and five alumina refineries.

One alumina plant listed owned by Hongqiao must, along with another in Zouping county, cut 2.5 million tonnes in output over the four months, according to the document.

The aluminium market, which has been roiled by expectations of supply curbs in China in recent months, has been awaiting news on how much capacity Hongqiao has to cut this winter.

Hongqiao was already forced to shut 2.68 million tonnes per year in capacity by the end of July, although it said in August that new facilities would keep its total yearly capability at between 6.5 million and 7 million tonnes.

Paul Adkins, managing director of consultancy AZ China, estimated that 2.05 million tonnes of the capacity listed in the Binzhou document had already been closed.

That would make any additional impact on Binzhou smelters this winter considerably smaller.

Reporting by Tom Daly; Editing by Manolo Serapio Jr. and Tom Hogue

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below