China¡¯s once top aluminum producing province short of aluminum as local processing industry booms

Henan, used to be China’s top aluminum producing province, now finds itself short of the light metal due to its booming processing industry, Shanghai Metals Market has learned.

With the rapid development of local processing industry, the province will see its aluminum production (forecasted at 3.28 million tonnes) fall short of consumption (forecasted at 4.5 million tonnes) in 2014.

Henan’s Gongyi City – China’s top flat-rolled aluminum products production base – is home to over 30 aluminum processors, whose combined annual capacity has surpassed 3 million tonnes. 2.5 million tonnes of aluminum ingot is needed annually to feed such large capacity in the city.

But most smelters in Henan are producing aluminum liquid for their own use or selling aluminum liquid to nearby processors. This has left a mere 1 million tonnes of ingot available for sale, creating a supply deficit of 1.5 million tonnes in Gongyi. Hence, smelters across the country are shipping aggressively to the region to capitalize on local shortage.

In this context, SMM has added Gongyi (Henan Beibadao Logistics Warehouse and State Reserve Bureau (Henan) #431 Warehouse) to its survey sample of China’s major aluminum trading markets (Shanghai, Wuxi, Hangzhou and Nanhai) in its weekly report.

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