New COVID-19 cases in Baise, Guangxi aggravate aluminium supply disruptions

On Tuesday, February 7, Baise, the leading aluminium-producing Chinese city, reported a surge in local COVID-19 cases for the third straight day and ensuing lockdown, which aggravated worries about supply disruption of the metal.

The city of Guangxi, with 3.6 million populations, recorded 64 new confirmed cases on Monday, up from 37 on Sunday and 6 on Saturday, reported National Health Commission.

The city has reportedly ordered residents to stay indoors and follow national guidelines to contain local transmission.

Restrictions due to the rise in covid cases in Baise have already hit alumina production, while many producers are experiencing transport disruptions, said Antaike, a government-backed consultancy. Concerns about production disarray have also lifted aluminium prices on the LME to a near four-month high on Tuesday, February 8.

As far as the aluminium production is concerned, Guangxi province has maintained normal output for the time being. At the end of January, operating capacity was at around 1.98 million tonnes, of which 1.73 million tonnes was in Baise City. But considering the uncertainty of the duration of pandemic and huge pressures of logistics, there is a risk of production cuts in the medium and long term.

The sudden outbreak of the pandemic is also likely to impact the follow-up shipments of aluminium ingot and billet in south China.