Chalco shuts 470,000 tonnes of aluminium capacity ¨C Report

Reuters reported that Aluminum Corp of China Ltd, known as Chalco, is cutting output on some of its aluminium production lines in northern China, as Chinese aluminium prices sank to a fresh two-year low. It told Shanghai Stock Exchange “China's biggest state-run aluminium producer has decided to make around 470,000 tonnes of annual output at units including Shanxi Huasheng and Shandong Huayu subject to flexible output arrangements, a euphemism for production cuts,”

Chalco said it took the step after considering market conditions and production restrictions required for environmental protection. It gave no timeframe for the duration of the cuts.

The company did not have to cut metal output on environmental grounds in the 2017-18 winter as its smelters are located outside the 28 northern Chinese cities required to place special restrictions on industry during the heating season.

The reductions are the latest casualty of plunging aluminium prices in China, driven by ample supply and weakening demand, which are leading some smelters to shut in production to avoid financial losses.

The 470,000 tonnes figure accounts for nearly 12 percent of Chalco's 3.93 million tonnes of primary aluminium capacity at the end of 2017, its latest annual report, which puts Shanxi Huasheng's annual capacity at 240,000 tonnes and Shandong Huayu's at 200,000 tonnes.

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