Shandong Qixing Group to suspend alumina & aluminium operations on huge debt

<p>Shandong Qixing Group Co., Ltd, an aluminium producer in China has suspended operations of its 130,000tpy aluminium smelter and is planning to halt operations at its 500,000 tpy alumina refinery due to heavy debt burden, as reported by Aladdiny, a Chinese information provider.</p> <p><img style="vertical-align: middle; display: block; margin-left: auto; margin-right: auto;" src="http://www.alcircle.com/uploads/images/Shandong%20Qixing%20Group.jpg" alt="News" width="517" height="226" /></p> <p>The report also says that the company might consider re-starting production in six months if the market conditions turn favourable.&nbsp; Huge debts have become a serious issue in the Chinese aluminium industry recently as many producers borrowed heavily to expand capacity. Such random capacity expansion has also contributed towards drop in global aluminium price pushing those smelters towards loss. &nbsp;</p> <p>As an aftermath of such huge borrowing in the market, credit of all kinds dried up, causing a drop in investment in the housing or infrastructure sector and a plunge in aluminium demand in the same sectors.</p> <p>{googleAdsense}</p> <p>Many large producers have faced the same difficulty as faced by Shandong Qixing. The Aluminium Corporation of China (Chalco) ramped up its assets from CNY82 billion in 2006 to CNY175 billion in 2012. In turn, Chalco recorded a huge loss of CNY17 billion in 2014.</p> <p>Recently, one of the world&rsquo;s largest aluminium players, China Hongqiao was accused of hiding over US$3 billion in debt by a short seller earlier this month, allegedly via underreporting and related-party subsidies. The allegations made the share prices drop about nine per cent leading to an emergency trading halt by Hongqiao.</p>