Chalco shuts 470,000 tonnes of alu­minium pro­duc­tion on price plunge


LUMINIUM CORP OF CHI NA LTD., also known as Chalco, is re­port­edly re­duc­ing out­put on some of alu­minium pro­duc­tion lines in north­ern China due to Chi­nese alu­minium price plunge to a two-year low, the com­pany an­nounced at the week­end.

Shang­hai alu­minium prices on Fri­day ended down 0.8 per­cent at RMB 13,555 per tonne, the low­est close since Septem­ber 30, 2016.

Chalco told the Shang­hai Stock Ex­change that it would shut around 470,000 tonnes of an­nual alu­minium pro­duc­tion at units in Shanxi Huasheng and Shan­dong Huayu, sub­ject to flex­i­ble out­put ar­range­ments.

Ac­cord­ing to the com­pany’s an­nual re­port, this 470,000 tonnes fig­ure ac­counts for nearly 12 per cent of Chalco’s 3.93 mil­lion tonnes of pri­mary alu­minium ca­pac­ity at the end of 2017.

This puts Shanxi Huasheng’s an­nual ca­pac­ity at 240,000 tonnes and Shan­dong Huayu’s at 200,000 tonnes.

China’s big­gest state-run alu­minium pro­ducer said it took this step af­ter con­sid­er­ing the mar­ket con­di­tions and pro­duc­tion re­stric­tions re­quired for en­vi­ron­men­tal pro­tec­tion, but gave no time frame for the du­ra­tion of the cuts.

Dur­ing the 2017-18 win­ter heat­ing sea­son, the com­pany did not have to cut metal out­put on en­vi­ron­men­tal grounds as smelters lo­cated out­side the 28 north­ern Chi­nese cities re­quired to place spe­cial re­stric­tions on the in­dus­try dur­ing the heat­ing sea­son.

How­ever, this win­ter’s re­stric­tions on smelt­ing are so far more le­nient than the stip­u­lated 30 per­cent curbs last win­ter, as cities can de­ter­mine the ex­tent of the cuts them­selves.

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