Sina Finance News
Ongoing operational restrictions on Xiaoyi refineries in Shanxi, require local refineries to cut operations by 50% from 8th ~20th August during the 2nd National Youth Games period, which is likely to curb local alumina output by 120 kt in August. As a result, it is expected that domestic alumina prices will stop falling, however, a significant rebound in prices is unlikely.
According to Aladdiny, Xiaoyi’s six local refineries have a total capacity of 7.9 mtpy, with 7.3 mtpy operational at present – meaning 3.95 mtpy will be on suspension during the period. Aladdiny analysts take the view that alumina production cuts in Xiaoyi will help halt slumping alumina prices in the short-term, but that long-term price support will be absent. Looking forward, in the case that the off-peak operation scheme is expanded to Shanxi (with 18.5 mtpy alumina capacity in operation), 300 kt alumina output will be reduced, consequently propping alumina prices in the near-term.