According to a government-run website, Shandong Xinfa Aluminium Group shuttered over half a million metric tons per annum of aluminium smelting capacity last week.
A statement on the Chiping county government’s website indicated that local government officials, Xinfa Group chairman Zhang Xuexin, and experts from Ailinte Safety Technology Consulting Company visited the site in eastern Shandong to verify that 530,500 metric tons per annum of capacity had been closed as directed.
Per the website, 426 units had been closed across Xinfa Group subsidiaries Huaxin Aluminium, Huayuan Aluminium, and Xinyuan Group as of last Friday.
The scale of capacity closure took few experts by surprise. Reuters cited AZ China’s Paul Adkins as estimating that around 2.2 million metric tons per annum of illegal capacity has been idled over the past four-and-one-half years. However, he warned that the firm still has at least another half million metric tons per annum of illegal capacity still in operation.
Long the recipients of ire from the global aluminium community over significant levels of subsidized overproduction that sunk prices to record lows, China has begun to reign in aluminium capacity that is operating in contravention of environmental laws, with many, if not most, of the cuts taking place in the far western Xinjiang province.