December 02, 2008

Chalco halts some output at Shanxi ventures on power

Bloomberg reported that Aluminum Corp of China Ltd may lose 30,000 tonnes of output after it halted some capacity at two ventures in Shanxi province because of a power shortage.

According to the report, Chalco's two Shanxi ventures were forced to halt production cells because of reduced power supplies. Power supplies look to remain tight in the coming months. Chalco didn't specify how long the cuts will last.

Chalco said in a statement that Shanxi Huaze Aluminum & Power Co suspended 25% of its 280,000 tonne annual capacity as of July 18th, and Shanxi Huasheng Aluminum Co stopped 22% of its 220,000 tonne capacity.

Mr Li Rong an analyst at Great Wall Futures Co said that the estimated loss is too small to ease a supply glut in China. He said that aluminum futures in London may have priced in a bigger production loss.

Aluminum jumped to a record USD 3,380.15 per tonne on July 11th after China's producers pledged to cut output by as much as 10% through September to help ease a nationwide power shortfall. The pledge came after the Shanxi government cut power to smelters, forcing Chalco and others to reduce production.