The world’s leading producer of alumina said on Thursday that it is entering “flexible production” that will translate into curtailing overall production by a tenth going forward.
Aluminum Corp of China Ltd (Chalco) indicated that cuts would be allocated across three alumina production lines at Shanxi Huaxing and Shanxi New Material in China’s northern reaches. Per government filings, the twin operations currently refine 1.8 million metric tons per annum.
Chalco said the cuts were done as a response to market conditions, but the firm did not elaborate. No indication was given regarding the term of the production cuts, either.
Domestic industry news reported earlier this week that the Shanxi Huaxing plant may have experienced an equipment accident, leading it to cut 1 million metric tons per annum of alumina refining production until repairs could be effected. When asked of the accident by reporters, Chalco’s representative simply indicated that the cuts were done as a normal adjustment to changing market realities.
Chalco has a reported company-wide nameplate production rate of 18.86 million metric tons per annum, having produced 13.8 million metric tons for the entirety of last year.
Alumina prices in the Middle Kingdom have increased by about 10 percent since a four-year low in April to CNY2,287 (US$324) per metric ton, but prices are still 6 percent down since the beginning of the year.
Chalco went on record three months ago as considering production cuts if prices did not sufficiently rebound. Meanwhile, that month saw a nine-month production max of 6 million metric tons of refined alumina, pushed largely due to relaxation of the measures taken to combat coronavirus in the prior months.