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CHALCO To Shut Down 1 Million Tons of Alumina Capacity

After the Spring Festival, China's alumina prices continued to decline from 3,000 yuan/ton to over 700 yuan/ton in just three months. According to Antaike's data, the average price of spot alumina was 2,278 yuan/ton on May 10, lower than the average full cost of the domestic alumina industry.

It's learned that due to the price downturn, increasing operating pressure and other factors, Aluminum Corporation of China Limited (CHALCO) decided to shut down its alumina capacity by nearly 1 million tons/year. The involved production lines are mainly the 800,000 tons/year alumina production line of CHALCO's Shanxi Branch and the 250,000 tons/year ore enrichment production line of CHALCO Zhongzhou, and the total capacity is 1.05 million tons/year.

Before this, some alumina enterprises in Shanxi had shut down some capacity due to environmental reasons, including East Hope Jinzhong's 1 million tons/year production line and Tianyuan Chemical's 300,000 tons/year production line. Other large alumina enterprises such as Jinjiang Group are also considering overhauling some production lines to cope with the current price weakness.

Antaike believed that as Chinese alumina enterprises begin to cut production again, domestic alumina prices are expected to stabilize, and after the effect of production reduction appears to take place, the supply-demand relationship may reverse and the alumina prices may start rising.