SAMR and Standardization Administration of China issue energy consumption ceilings for aluminium production

According to a recent report, the State Administration for Market Regulation (SAMR), the ministerial-level agency directly under the State Council of China, together with the Standardization Administration of the People’s Republic of China, has issued energy consumption ceilings for aluminium and alumina production per unit of product. This will come into effect from January 1, 2024.

Aluminium, being an energy-intensive metal, consumes the lion’s share of power, with thermal being the dominant source. Its production process is accompanied by high energy consumption and high carbon emissions.

Following China’s “dual carbon” goal (carbon peak and carbon neutrality), the country’s aluminium production capacity contracted, with constrained capacity utilization rates.

SMM data showed China’s operating aluminium capacity stood at 40.26 million tonnes at the end of January 2023, down by 170,000 tonnes from the end of 2022.

The Chinese economy started recovering late last year when China lifted its COVID restrictions, resulting in a rise in aluminium demand. As a consequence, aluminium prices will increase in the medium and long run.