Casting and processing operation of aluminium semis affected in China due to tightened environmental curbs

According to Shanghai Metals Market, casting and processing operation of aluminium rod, coil, and plate producers in Gongyi, Jiaozuo, and Zhengzhou cities of Henan province are affected to varying degrees since September 4. The reason is the tightened environmental curbs by the local government to prepare for the 11th Chinese Ethnic Games taking place in Zhengzhou during September 8-16.

The latest SMM survey indicates the actual impact of the output controls could be temporary, for about 10 days.

SMM learned large logistics vehicles are not allowed to enter Zhengzhou. Also, checks against vehicles overloading are tightened since August 25, ahead of the Chinese Ethnic Games.

In Huiguo county of Gongyi, the production that involves volatile organic compound (VOCs) emissions, such as manufacturing of aluminium cold-rolled coil, wire, cables, and plastic products are also suspended during September 4-17.

Aluminium rod producers in Jiaozuo, on the other hand, had to halve production from September 6, while producers of aluminium plate, strip in Yingyang would have to stop casting operation.

Suspension of casting led to aluminium processors in Henan procure feedstock cast-rolling coil from other areas like Inner Mongolia, Xinjiang, and Qinghai. This resulted in #1 series cast-rolling coil price hike in Henan from RMB 550 per tonne at the end of August to RMB 600 per tonne as of Friday, September 6, SMM found.

Higher costs of raw materials also triggered the prices of aluminium plate and strip in Henan. However, local producers are trying to keep their offers minimal, given poor downstream orders since August.