A trio of sources claiming knowledge told Reuters yesterday that representatives from China Hongqiao Group, Aluminum Corp of China Ltd (Chalco), and other Chinese major aluminium producers will hold a meeting today to hash out the implications of falling prices and weak demand for the country’s aluminium sector.
Per the unnamed sources, the China Nonferrous Metals Industry Association (CNIA) initiated the gathering, which is to be held in Guangxi Zhuang Autonomous Region’s capitol of Nanning in Southern China.
A source indicated that Hongqiao will send the general manager of its sales unit. Hongqiao publicly acknowledged receipt of the invitation, but would not go into specifics regarding further details of the meeting.
A different source, who is an executive at Chalco, told Reuters that he personally would attend the event. Reuters did not name the executive source.
For its part, CNIA did not issue public comment on the rumor, despite Reuters’s attempts at making contact with Wen Xianjun, the Association’s vice president.
“This gathering together is more like the one that happened at the end of 2015, when the ShFE prices went down to below 10,000 yuan,” explained CRU’s Jackie Wang from Beijing.
“And I think probably the producers – the major ones – will talk about what they can do to support the market, if there’s a possibility to do further curtailments.”
Per CRU estimates, approximately 2 million metric tons per annum of aluminium capacity has been idled to date due to the recent nadir in low prices.
At the previous such meeting three years ago, Chinese aluminium smelters agreed to a combined capacity cut of 500 thousand metric tons per annum by year’s end. At that point, 4.41 million metric tons per annum of capacity had been shuttered due to low prices.
Prices in Shanghai of raw aluminium have fallen 14 percent over the course of the calendar year, rivaling the 2015 slump. Yesterday saw prices at the ShFE drop to US$1,970.20 per metric ton, bouncing back slightly from prices earlier this month at depths not seen since the fall of 2016.