China's Xinfa ordered to shut 381,900 T of aluminum capacity this winter: document

BEIJING (Reuters) - Xinfa Group, one of China’s largest aluminum producers, may have to cut output at its smelter in Shandong province to comply with the government’s planned curtailments to ease air pollution, according to a draft policy reviewed by Reuters.

Xinfa will have to cut capacity by 381,900 tonnes at its smelter in the city of Liaocheng in western Shandong starting from Nov. 15 until March 15, the draft document from the city authorities showed.

A government official for Liaocheng city confirmed the authenticity of the draft and said a final version would be published before Friday.

Xinfa’s smelter in Liaocheng can produce 1.58 million tonnes of aluminum per year, the document showed.

The cuts come after China’s central government has ordered some factories across 28 northern cities to slash output during the traditional winter heating season in order to curb smog. The shutdowns coincide with the heating season to minimize industrial air pollution mixing with smoke from coal-fired heating and electricity units to produce the smog.

China is the world’s top producer of aluminum.

A Reuters survey of six consultancies and brokerages last week showed that up to 1 million tonnes of the light metal, used in making cars and white goods, could be cut during the four-month heating season.

Xinfa did not respond to requests for comment.

Xinfa also has smelter capacity in the western region of Xinjiang, which will not be subject to the winter cuts.

The company has already been forced to shutter 530,500 tonnes of illegal aluminum production capacity this year.

Reporting by Tom Daly, Melanie Burton and Beijing newsroom; Writing by Josephine Mason; Editing by Christian Schmollinger