Secondary aluminium smelters in China come under environmental scanning

China government launched its third round of pollution control inspections on April 24 in seven provinces, a move feared to strike the nation's secondary aluminium smelters with large carbon footprints. Shanghai Metals Market surveyed to find out how big the impact could be on the downstream aluminium market demand.

Automotive industry being the largest consumer sector of secondary aluminium smelters in China is thought to be hit temporarily by the semi-finished products supply uncertainties. However, analysts opine that the secondary aluminium price will not increase, as the pollution checks are likely to have minimal effect.

China launched the environmental inspections in Tianjin, Shanxi, Liaoning, Anhui, Fujian, Hunan and Guizhou provinces of China. Most of the secondary aluminium smelters in these regions are small, with monthly output rarely exceeding a hundred tonne, except SIGMA and Fujian Huayin Aluminum Industry.

In the second half of 2016, local Chinese government had launched similar environmental protection inspections which clamped down most unqualified smelters. So, this time, the effect is expected to be far less.

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Moreover, as large secondary aluminium smelters, including SIGMA and Fujian Huayin Aluminum Industry have well-equipped environmental facilities this round of inspection would make little impact on them, observe SMM.