Xinjiang Prefecture directs five Chinese aluminium smelters to reduce production

According to a recent report, five Chinese aluminium smelters will require to reduce production starting from this month as a prefecture in Xinjiang region has imposed output limits to stamp out illegal production, which sent Shanghai aluminium prices to a 13-year high.

Reuters calculations have found that monthly limits across five smelters will reduce 10 per cent of the total production in the first seven months of the year.

Xinjiang is a major smelting hub in China that accounts for one-fifth of the supply to the world’s biggest producer and consumer of aluminium.

According to a Reuters report, prefecture in Changji, Xinjiang, has directed the smelter East Hope to keep monthly production at 54,000 tonnes starting from August and yearly output at 800,000 tonnes (max.). Compared to the smelter’s average monthly output of 75,000 tonnes in January-July, the new limitation will reduce output by 28 per cent.

The other four companies which have also been asked to reduce production include Qiya Aluminium, Xinjiang Shenhuo, Xinjiang Jiarun and Tianlong Mining. Their combined annual production in 2021 must not exceed Changji's authorised capacity of 3.05 million tonnes, as per the report.

Aluminium prices in China SAFcv1 grew on Thursday night session to RMB 20,750 per tonne, the highest since August 22, 2008.