Up to half a million metric tons per annum of aluminium smelting capacity in Guangxi may be temporarily shuttered after the local power provider warned aluminium smelters in the region that it would soon begin rationing electricity to those plants.
Guangxi Power Grid Corp said on Saturday that local aluminium smelters would be tasked with dropping their average electricity load by almost one third by this coming Sunday. According to AZ China and MySteel, the region is struggling with power shortages at present, and the move is part of the state power supplier’s efforts at mitigating these shortages.
The power company said that aluminium smelters that did not comply could expect to have their power shut off within half an hour of a warning telephone call.
Estimates vary, but the consensus is that between 415.5 thousand and 500 thousand metric tons per annum of aluminium smelting capacity in the region will ultimately be taken offline by this time next week. As of Monday, 85 thousand metric tons per annum had been taken offline.
Capacity limits in Guangxi will squeeze an already underserved aluminium market in the Middle Kingdom, which is struggling to keep up with an uptick in demand for aluminium occasioned by a lull in the coronavirus pandemic earlier this year.
There is no word when the energy limits are set to expire, and media inquiries to Guangxi Power Grid Corp went unanswered.
Power limits to aluminium producers in Guangxi follow a similar move in neighboring Yunnan, which is home to a great deal more aluminium capacity.