China aluminium industry up for policy reshuffling in H2 2017, rolls out ‘capacity swap’ programme

China aluminium industry is on the verge of getting a widespread reshuffling in the second half of this year. After the three major aluminium producing regions of the country issued recent policy changes to crack down on illegal and outdated aluminium smelters, the government took the decision to implement such policies on a wider scale, with possible few more additions, reported local media.

Governments of Xinjiang, Shandong, and Inner Mongolia have issues documents to shutdown illegal aluminium capacity in these regions.

In another development, China announced a 'capacity swap' programme aimed at tackling severe overcapacity in the domestic aluminium industry.

Under this project, China government will approve a new project only if it is decalred ready for being "swapped" with an identified "eliminated" smelter of the same capacity. In principle, no new aluminium projects will be allowed under any other name.

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As of February 2017, global primary aluminium supply rose 11.1 per cent year-on-year, while demand grew 11.5 per cent, leaving a supply deficit of nearly 4,000 tonnes, Shanghai Metals Market reported.