China's Xinfa to lift Xinjiang aluminum capacity by 69%

China's Shandong Chiping Xinfa Group plans to raise the capacity at its Xinjiang aluminum smelter by 550,000 mt/year to 1.35 million mt/year by the end of the year, up 68.8% from 800,000 mt/year currently, a source close to the company said Friday.

"We have already completed the 550,000 mt/year expansion, but it is not operating as yet, and we've not confirmed when it will start up, probably after the holidays next week," he said. "But it should definitely be by the end of this year."

In 2013, the Xinjiang smelter is expected to produce 800,000 mt of aluminum, in line with the output in 2012. The company aims to produce 1.3 million mt in 2014, the source said.

The prevailing weak domestic aluminum market has not deterred the company from its expansion plans in Xinjiang as costs in the region were comparatively lower than other parts of China, the source said.

The smelter is expected to be expanded to a design capacity of 2.4 million mt/year, but the source could not give a time line for this.

The alumina feedstock for the Xinjiang smelter comes mainly from Xinfa's own refineries in Shandong and Shanxi.

The company operates a 6 million mt/year refinery in Shandong province, which currently runs at 4 million mt/year. In Shanxi, it operates the 2.4 million mt/year Jiaokou Feimei Aluminum refinery, which is running at 1.2 million mt/year, as well as the new 800,000 mt/year Shanxi Xinfa Chemical refinery.

In South China, Xinfa operates the 2.4 million mt/year Guangxi Xinfa Aluminum refinery, which is running at run rate of 2 million mt/year.