Beijing Shuttered 320,000 MT/Year in Aluminium Capacity in 2016: Information Ministry

The People’s Republic of China’s aluminium sector shed 320 thousand metric tons per year of aluminium capacity in 2016 according to an announcement on the country’s Ministry of Industry and Information Technology website that was published on Wednesday.

The announcement also revealed that the Middle Kingdom also shuttered almost eleven million metric tons per annum of steel capacity, 6.77 million metric tons per year of iron capacity, and 5.59 million metric tons per year of cement capacity. In addition, over 1,500 coal mines with capacity totals below 300 thousand metric tons per year were idled in 2016, totaling a nationwide drop in production capacity of better than 100 million metric tons per year.

The rationale behind the closings is to ease overcapacity in those markets, to save energy, and to cut the country’s overall emissions according to the ministry. In addition, the ministry confirmed that such cuts, which targeted outdated and obsolete capacity, were part of an overall strategy by the government to effect supply-side reform in those sectors.

The MIIT went on to say that such cuts were only the tip of the proverbial iceberg, as more measures must be taken to permanently eliminate capacity that is outdated and out of compliance with state standards. In addition, the ministry said policies must soon be implemented to allow these industries access to resources and energy as they develop technology that would improve quality, efficiency, and sustainability.

The ministry went on to point out that a lack of domestic resources and a weaker ecological system has aggravated degradation wrought on the country’s environment, stunting the development of a healthy society. Such considerations also motivated the cuts to capacity made last year as well as cuts that are to come. The ministry concluded by pointing out that over the course of the 13th Five Year Plan (which runs through 2020) the government is working to reduce the domestic aluminium industry’s growth and stock in an effort at bringing global prices back up to appealing levels.



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