Shanghai Nonferrous Metals News
18th February, SMM: The COVID-19 epidemic has resulted in 4.6 mtpy of alumina capacity cuts (including calcination processing capacity), reducing China’s operational alumina capacity to 62.21 mtpy. Of this figure, Shanxi has made 3.8 mtpy of alumina capacity cuts and Henan has cut 200 ktpy. Xiaoyi Xinfa alumina refinery suspended one additional 1.2 mtpy alumina production line this morning after shutting down a 1.2 mtpy production line early February on tight domestic bauxite supply and coal gas shortages. The company was designed with 3.6 mtpy alumina capacity, but only one alumina production line (1.2 mtpy) is currently operational.
In northern China, most integrated alumina refineries with captive mines, caustic soda plants and direct railway connections have ample raw materials in stock and are operating normally. However, other refineries reliant on bauxite supply sourced from the market and road transport are grappling with problems of supply and are having to cut or suspend operations. According to SMM, road transport of coal from Shaanxi to Shanxi and Henan continues to be slow, affecting coal stocks at some refineries. Meanwhile, lime transport from Hubei (the center of the outbreak) to Henan refineries have stalled. With most privately owned bauxite mines in Shanxi and Henan still under suspension, local refineries face difficulties in restocking and have low bauxite inventories. In southwestern China, operations at local refineries are uninterrupted by the COVID-19. On 15th February, the local authority of Guizhou lifted its ban on cross-city transport, easing the pressure on transport to and from local refiners.
Alumina inventories at some primary aluminiuim smelters are still tight and several smelters in north western China have lifted their quotations in response. The combination of restricted road transport and expanding capacity cuts at refineries is likely to prop spot alumina price in the short-term.