China Hongqiao Group asked to close up to 550,000 tonnes of aluminium production for winter: Source says

Going by Chinese consultancies AZ China and CRU’s calculations based on a local government document Reuters reports that China Hongqiao Group has been asked to close up to 550,000 tonnes of annual aluminium smelting capacity this winter. That is about equal to 1-1/2 days of aluminium consumption in China, noted AZ China Managing Director Paul Adkins.

The city of Binzhou in Shandong province, where all of Hongqiao’s 6.46 million tonnes per year of aluminium capacity is located, reportedly listed pot closures at five Hongqiao smelting facilities in a document outlining winter restrictions.

Some of the closures which have a total production capacity of 8.5 per cent of that of Hongqiao’s need to cut production for December and January instead of the full four-months winter heating season (mid-November’18 to mid-March’19).

Besides, per the Binzhou document, around 1 million tonnes of annual alumina capacity is required to cut at each of two Hongqiao alumina refineries for the full four months winter heating season. This 2 million tonnes cut is almost 13 per cent of the company’s total operating capacity for alumina.

The closure orders point to relatively lenient winter curbs versus the 2017-18 winter. Last year, 28 northern cities, including Binzhou were ordered to cut aluminium and alumina production by 30 per cent.

On Tuesday, November 27, Hongqiao Group said in an email that it would “actively respond to the Binzhou winter cuts in accordance with the list issued by the government,” but declined to provide further details.