China Nonferrous Metals News

Henan presently has 12.5 mtpy completed alumina capacity with 8.9 mtpy in operation. Shanxi has 26.1 mtpy completed alumina capacity with 17.1 mtpy in operation. Alumina capacity in Henan and Shanxi has been suspended by 28.8% and 34.5% respectively due to previous losses, but further capacity cuts during 2019~2020 winter are unlikely according to relevant policies regarding production cuts, and will have limited impact on marginal supply of alumina this winter. Furthermore, Shanxi Jiaokou Xinfa has no plan to restart full capacity operation in the short-term, creating opportunities for other northern alumina refiners to increase output. As a result, alumina output in northern China is likely to climb this winter on rising alumina prices.

Domestic primary aluminium capacity is unlikely to contract further during the 2019~2020 winter given 2019’s capacity decline – the first in the past ten years. During the 2017~2018 winter season (October 2017~March 2018), a total of 560 ktpy primary aluminium capacity was cut and the figure for 2018~2019 winter season was 86 ktpy, indicative of limited reductions. It is estimated that 70 ktpy of primary aluminium capacity will be curbed during the 2019~2020 winter. Meanwhile, domestic primary aluminium output is expected to increase on-month driven by new capacity coming online in IM, Yunnan, and Sichuan.


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