According to a report on Wednesday, November 1, aluminium smelters in southwestern Yunnan province, China have started cutting production as the dry season sets in. A smelter manager and two analysts have posted that smelters have begun the process of production cut of a total of 1.5 million tonnes of capacity.
Li Lin, the aluminium director of AZ Consulting, has pointed out that Yunnan smelters are following the order of China Southern Power Grid, which directs them to reduce output by 9 per cent to 40 per cent of capacity.
Yunnan is known for its abundant resources of hydropower, which have attracted many aluminium smelters from different parts of China. Yunnan has a capacity of 5.7 million tonnes, being the fourth largest aluminium-producing region in China and accounting for 12 per cent of the country’s total capacity.
However, the only drawback of Yunnan province for being reliant on hydropower is it is entirely dependent on weather. The scarcity of rainfall at any time of the year reduces power generation, leading to reduced aluminium production.
Li said smelters would most likely complete the production cuts by November 5. Major aluminium producers in Yunnan include Yunnan Aluminium, China Hongqiao Group, Yunnan Shenhuo Aluminium, and Qiya Group.
A manager at one of the producers reported to Reuters that they began the production cut on Wednesday, November 1, and would continue operating with reduced output until the rainy season starts next year. Yunnan’s dry season typically runs from November to April.
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