China Hongqiao closes 2.68 MT capacity; China July aluminium output down by 8.2% MoM

The world’s largest aluminium producer China Hongqiao confirmed Monday, August 14 that it had closed 2.68 million tonnes of smelting capacity after Shandong Government ordered it to do so in an attempt to curb illegal capacity.

The aluminium capacity closed by Hongqiao was spread over five projects. Neither Hongqiao nor any of its subsidiaries was charged a penalty by the authorities, Shandong Weiqiao Aluminum & Electricity said in a disclosure made to the Shenzhen Stock Exchange.

Shandong Hongqiao is the sole shareholder of Shandong Weiqiao, and all the capacities closed are the newly added ones by these two companies and their subsidiaries.

Presently, Hongqiao has a total aluminium capacity of 6.46 million tonnes per annum, which remains unaffected by the recent closures. As per August 2 update, the company’s annual metal production is expected to cross 7 million tonnes mark with utilisation rate exceeding 100 per cent.

The Shandong Development and Reform Commission had recently mandated 3.21 million tonnes of aluminium smelting capacity closure by the end of July this year, and that included 2.68 million tonnes from Hongqiao.

In another update, China’s total aluminium output in July fell 8.2 per cent from a record high in June. The country produced 2.69 million tonnes of the aluminium last month, down from 2.93 million tonnes in June, revealed National Bureau of Statistics (NBS) data.