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Chinese alumina firms to cut output

Reuters reported that China's top 5 alumina producers including Aluminum Corporation of China Limited will cut production by 10% from June because of changes in the supply of bauxite imports.

Chalco will cut alumina capacity by 1.7 million tonnes because the change in Indonesia's bauxite policy had affected the supply of imported bauxite for the company. It has an alumina capacity of 14 million tonnes a year, making it the country's top producer of the material used for the production of primary aluminium.

Indonesia, China's top bauxite supplier imposed 20% tax to exports of some metals ores including bauxite, in May and cut shipments affecting supply to China. Indonesia also plans to ban the export of ores in 2014.

A rise in import prices is pushing up domestic prices of alumina in China, prompting aluminium smelters to import the material alumina. China's alumina imports surged 74% from a year earlier to 1.44 million tonnes in the first four months. Smelter sources see monthly imports staying high in the second quarter which could squeeze local alumina producers' profits.

Chalco said that in the principle of maximizing benefits, the company has determined to implement flexible production arrangements. Chalco and four other top alumina producers were proposing that all alumina producers in China cut production by 10% from June in order to stabilize the market.

Source - Reuters

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