Environmental protection inspection and measurement have resumed in some Chinese provinces like Henan, which may cause aluminium plate, sheet and strip enterprises to reduce production. The Shanghai Metals Market is closely monitoring the situation as Henan is a hub for aluminium plate, sheet and strip production; therefore, output cuts will likely dampen China’s total production of aluminium flat products.
Image Source: Mingtai Aluminium
According to SMM, China’s domestic operating capacity of aluminium plates, sheets, and strips exceeded 20 million tonnes, with about 40 per cent located in Henan.
An industry player has pointed out that operation restrictions in Henan during the winter heating season have become almost an annual practice, causing impacts on aluminium production. So, over the years, local aluminium plate, sheet and strip enterprises have accumulated rich experience in responding to regulations.
During this time, most of these enterprises conduct facility maintenance and equipment repairs to resume their operations with higher capacity once the restrictions are eased to make up for the output shortfall. Since a single environmental protection-driven production restriction lasts less than a week, most restrictions affect short-term output, having a relatively small impact that can be quickly mitigated.
So, overall, SMM concludes that winter environmental protection production restrictions in Henan have a negligible impact on the aluminium plate, sheet and strip industry. The rest depends on domestic and international market demand, which determines the industry’s operating rate.
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