SMM News

 SMM: At present, transport to and from alumina refineries is severely disrupted by the spread of NCP (Novel Coronavirus Pneumonia), resulting in slowed new raw material arrivals and deliveries of alumina.

Domestic bauxite supply has been short at some refineries, in particular at refineries using HT production lines without captive mines. This is a consequence of the restrictions on road transportation and extended mine holidays. Bauxite operations at ports are running normally, meanwhile, with the end of the rainy season in Guinea and the recent decline in sea freight costs, shipments of imported bauxite are likely to increase in the near term. However, due to restricted road transport, inventories of imported bauxite are already building up at ports, and refineries reliant on imported bauxite in IM, Shanxi face declining stocks.

Domestic caustic soda producers also face delivery problems, as cross-province road transportation has been restricted. In comparison to refineries in Henan and Shanxi, refineries in Shandong are less affected, as the majority of Shandong refineries are located near to caustic soda producers and inner-city road transport is operating as normal to date.

The majority of domestic coal mines in Shanxi and Shaanxi will resume operations after 9th February 2020, however, delivery of coal from ports to refineries has been difficult. It has been reported that three large refiners in Shandong and Shanxi had to halt or was planning to halt part of their calcination processing due to coal shortages.

Deliveries from alumina refineries have been affected as well. Road transport is restricted during the epidemic period, and delivery plans must be submitted for advance approval. Furthermore, with few trucks and drivers available, logistics have been difficulty – even for higher offers.

Some refineries in Shanxi and Shandong have already cut or suspended operations, which – together with the calcination processing suspended prior to the holiday – sees total suspended alumina capacity estimated at 2.1 mln t. An increasing number of domestic alumina refineries are likely to halt operations in northern China due to the extended holiday. In southwestern China, local refineries have been operating at the same level as end-January with sufficient raw materials to maintain normal operations. Meanwhile, some Chongqing and Guizhou refineries are seeing their alumina stocks building up due to transport restrictions.

SMM forecast domestic alumina (SGA) output of 5.12 mln t in February 2020, represented by average daily output dropping to 176 kt for the month.



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