Makers of aluminium rod, coil, and plate in Henan province are seeing a temporary drop in production due to environmental curbs related to the area’s hosting of the 11th Chinese Ethnic Games this week according to domestic trade media.
Producers in the Henan cities of Gongyi, Jiaozuo, and Zhengzhou are likely to see a 10-day impact from the temporary environmental cuts, according to Shanghai Metals Markets (SMM). Large logistics vehicles are prohibited from entering Zhengzhou at present, and vehicle load inspections became stricter as of August 25, per SMM.
In Gongyi and the remainder of Huiguo county, SMM indicates that the production of materials that result in the emission of of volatile organic compounds (VOC) has been curtailed entirely from September 4 through September 17, affecting the production of aluminium cold-rolled coil, wire, cables, and plastic products. Producers that neglected to complete environmental rectification have been suspended as well.
Meanwhile, producers of aluminium rod in Jiaozuo have operated under a mandatory 50-percent cut in production since last Friday, while producers of aluminium plate and strip in Xinyang curtailed casting entirely.
SMM says the draw-downs have compelled aluminium producers in the province to look to the west for cast-rolling coil feedstock, querying from producers in Inner Mongolia, Xinjiang, and Qinghai. The resulting rise in demand pushed priced upward, sending the cost of #1 series cast-rolling coil in Henan up by CNY50 to CNY600 per metric ton on Friday last.
On the whole, Henan aluminium producers have resisted raising prices due to tepid downstream demand last month, though SMM reports that an expected rise in raw materials may buoy the price of aluminium plate and strip in the province in the near future.