A top aluminium smelter in the People’s Republic of China has escaped winter metal production cuts for 2018-2019, and will be mandated to drop alumina production by only a tenth for two months this season.
Per documents published by the Liaocheng Economic and Information Technology Committee and acquired by Reuters, Shandong Xinfa Aluminium Group is among those listed as having an exemption from the scheduled seasonal cuts. The company’s 1.4 million metric tons of smelting capacity will remain untouched through this winter, in stark contrast to last season’s mandated 30-percent curtailment from mid-November through mid-March.
The only cuts to which Xinfa will be subject will be a 10-percent curtailment to the firm’s 4.4 million metric tons per annum alumina smelter. The cuts are to run from the beginning of December through the end of January.
Though the general heating season runs from mid-November through mid-March, the central government has given provincial governments the latitude to determine their own curtailment periods. The Shandong government mandates that municipal governments impose a minimum two-month curtailment period should cuts be issued.
An unnamed official from the Committee confirmed the documents’ authenticity with Reuters, warning that certain adjustments may still be carried out to the plans for the coming winter.
With expectations of similarly lax cuts in most other cities, prices in Shanghai have retreated, falling by 8 percent since the close of August and reaching a new two-year low on Wednesday.
Per an unnamed Xinfa source who spoke to Reuters, the alumina restrictions are not likely to do material harm to the firm.
There has been no word so far whether curtailments will be imposed upon China Hongqiao, which is also based in Shandong province. Xinfa’s 2 million metric tons per annum of smelting capacity in Xinjiang is unlikely to be subject to restriction, as no such cuts were made in the region last year.