Majority of Domestic Producers to Resume Operations Late Feb.

Fubao News


According to a recent notice published by the authority of Gongyi, Henan, local producers must submit resumption requests and pass assessment before restarting operations. Local producers are required to resume operations in three groups after 10 February, 17 February and 24 February. However, it was reported that the majority of domestic producers would resume operations in late February at the earliest.


Analysts take the view that given the uncertainties in prevention and control of NCP, a full return to operation of industrial producers is unlikely. Manufacturers reliant on migrant workers will see relatively low operational rates in the near term and in the case that manufacturers resume operations gradually, the problem of worker shortages led by travel restrictions is unlikely to ease quickly. Industrial operation rates will fall significantly due to worker shortages in NCP affected areas such as Hubei, Guangdong, Zhejiang and Henan.


In the short-term, domestic consumption of primary aluminium will remain weak. As of today, no primary aluminum smelter had been reported as halting or cutting operations due to a shortage of raw materials or workers. Meanwhile, with rail transport running normally at present, aluminium inventory at China’s social warehouses is likely to build rapidly in the short-term, with the overall amount exceeding 1 mln t level, a momentum which is likely to continue through to March.



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