Shandong Weiqiao announces to cut 250,000 tonnes of aluminium capacity

The Chinese government is continuing to push for wide-scale aluminium supply side reform. After China Hongqiao Group, the biggest aluminium producer in China, announced curtailment of its outdated capacity a few days back, it is time now for another aluminium giant Shandong Weiqiao Group to walk the same path.

The company, also a subsidiary of China Hongqiao Group, announced that it will cut aluminium capacity by 250,000 tonnes. This decision comes as a huge boost to the government’s aluminium supply side reform initiatives. Unnamed sources say that Weiqiao has already started executing its plans, but there were no official confirmation prior to this.

Shanghai Metals Market (SMM) learnt that the aluminium supply reforms will take much longer than it was expected.

While on one hand, existing illegal aluminium capacity or those under construction is being halted, on the other hand, commissioning of new capacity and restarts of old legal capacity is being shown green signals. The actual effect of supply-side reforms will not be felt unless this dichotomy ends or a well-strategized middle path is worked on.

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There are other contradictions in the modus operandi as well. Illegal aluminium smelter projects under operation that partly meet environmental requirements are being given some leg space. They are being considered to be put on file in accordance with the regulations.