China aluminum capacity cuts boost market leaders, prices – by Tom Daly and Melanie Burton (Reuters U.S. – August 3, 2017)

https://www.reuters.com/

BEIJING/MELBOURNE (Reuters) – China’s crackdown on its bloated aluminum industry is driving up the share price of the country’s major producers and raising the specter of a tighter global market that could buoy prices.

China is forcing the suspension of aluminum plants that have not obtained proper permits to build or expand, or that have not met strict environmental standards, as Beijing pushes to clear its skies and shore up loss-making industries.

China accounts for nearly 60 percent of global aluminum output and analysts estimate some 3-4 million tonnes of capacity could close this year, around a tenth of the country’s total, tightening the global market.

China Hongqiao Group Ltd, the world’s largest maker of aluminum, said on Wednesday it plans to shut more than 2 million tonnes a year of outdated smelter capacity. This would be replaced with new capacity, but it gave no timeframe.

Beijing has also ordered steel and aluminum producers in 28 cities to slash output during the winter heating season that starts in November to curb pollution, spurring local investors to anticipate gains for big producers when a shortfall bites.

For the rest of this article: https://www.reuters.com/article/us-china-metals-aluminium-idUSKBN1AJ0QO

 

Comments are closed.