We use cookies from our users to operate this website and to improve its usability. You can find details of what cookies are, why we use them and how you can manage them in our Cookies page. Please note that by using this site you are consenting to the use of cookies.

Do not show me this message again Close

We've just launched!
AlCircle China
/Images/icons/news-icon.png Secondary Aluminium - News
  • How will stricter environmental checks affect secondary aluminium smelters and prices? SMM Reports

    Shanghai Metals Market

    The environmental protection storm swept across the regions in China in 2016, and this will continue to 2017. How will this affect China’s secondary aluminum industry?

    China’s four ministries jointly issued 2017 Air Pollution Prevention and Control Action Plan in Beijing, Tinjin and Hebei on February 28. The Plan mentioned environmental protection works in casting industry but excluded electric furnace and natural gas-fired furnace, and the government only announced to restrict coal-fired furnace. The action will cover Beijing, Tianjin, Hebei’s Shijiazhuang, Tangshan, Langfang, Baoding, Cangzhou, Hengshui, Xingtai, Handan, Shanxi’s Taiyuan, Yangquan, Changzhi, Jincheng, Shandong’s Jinan, Zibo, Jining, Dezhou, Liaocheng, Binzhou, Heze, Henan’s Zhengzhou, Kaifeng, Anyang, Hebi, Xinxiang, Jiaozuo and Puyang.

    According to SMM survey, in those regions, Shandong, as a large secondary aluminum production area, has secondary aluminum capacity below 50,000 tonnes per year without large secondary aluminum producers, such as Baoding Longda Aluminum Industry, Rizhao SIGMA, Linyi Lixin Aluminum Industry, Chalco Qingdao Branch and Yantai Best Aluminum. Most secondary aluminum smelters in Henan are small, which produce secondary aluminum below national standard, and other smelters produced national standard secondary aluminum below 50,000 tonnes per year. There are little secondary aluminum smelters in Shanxi, with annual capacity below 10,000 tonnes. In Baoding, Hebei Province, Lizhong Group and Baoding Longda Aluminum Industry produce 300,000 tonnes of secondary aluminum per year and other small smelters can produce 30,000 tonnes. However, most secondary aluminum smelters in Baoding have switched from coal-fired to natural gas-fired and equipped environmental protection facilities after repeated environmental checks. One secondary aluminum smelter told SMM that local smelters will not close down unless air pollution exceeding standard, even in heating season in winter.

    In other news, SMM learns that the government will launch one-month environmental protection inspections in Zhejiang, Jiangsu and Shanghai in June. Some local small and medium secondary aluminum smelters in those regions have started switching from coal-fired to natural gas-fired as all coal-fired furnaces will be closed down by then.


    From the chart, the affected capacity only accounts for 8.7% of China’s total capacity. Besides, aluminum scrap supply and downstream casting demand are attributed to main factors behind secondary aluminum price after 2017 Chinese New Year holiday.

    Most aluminum scrap suppliers reopened after Lantern Festival on February 11, tightening aluminum scrap supply in China’s market. ADC12 secondary aluminum price thus advanced to 14,800-15,000 yuan per tonne in southwest China, 15,200-15,400 yuan per tonne in eastern China and 15,100-15,300 yuan per tonne in southern China on February 15. However, insufficient aluminum scrap supply eased from mid-March after suppliers restarted trading. This, combined with thin trading in auto market, raised secondary aluminum smelters’ pessimistic outlook in anticipation of earlier off-season, and some secondary aluminum chose to have maintenance. Small and medium secondary aluminum smelters in Shandong, Chongqing and Zhejiang are under fierce competition in response to falling orders, prompting ADC12 secondary aluminum price to slide sharply. On April 13, ADC12 secondary aluminum prices were 14,550-14,750 yuan per tonne in southwest China, 15,000-15,200 yuan per tonne in eastern China and 15,100-15,300 yuan per tonne in southern China respectively.


    With increasing aluminum scrap supply, low stock-building interest at secondary aluminum smelters, small influence from environmental checks and quieter auto market demand, ADC12 secondary aluminum price is expected to decline further. But the decline will be slowed down for the near term thanks to rising SHFE 1706 aluminum.

    Get fresh Aluminium data and insights