Chinese city confirms Xinfa aluminum capacity cut

BEIJING (Reuters) - Xinfa Group, one of China’s top aluminum producers, will have to close 381,900 tonnes per year of smelting capacity this winter, its home city of Liaocheng confirmed on Friday.

Xinfa must shut 30 percent of its pots in Liaocheng, one of 28 northern Chinese cities ordered to impose restrictions on industrial output this winter to combat smog, from Nov. 15 to March 15, 2018, according to a document published on the Liaocheng government website.

A draft of the document circulating earlier this week contained the same number for the Xinfa cut and Liaocheng has now finalised its restrictions for the heating season.

Xinfa’s smelting capacity in Liaocheng, in the eastern Shandong province, was listed as 1.58 million tonnes per year, although it also has capacity in Xinjiang that will not be subject to winter cutbacks.

The document also showed that Xinfa must reduce output at a 7-million-tonnes-per-year alumina refinery by the equivalent of 2.6 million tonnes per year, or some 37 percent, over the same period.

Shortages of alumina, the raw material for producing aluminum, may become more severe in the coming months as an environmental crackdown in China is due to shut capacity, forcing smelters to scramble for supplies and pushing up prices.

Reporting by Tom Daly; Editing by Gopakumar Warrier