China's Henan seen unlikely to cut aluminium output further

Smelters in China's top aluminium producing province, Henan, are unlikely to cut production further as prices have risen more than 4 percent since late June, a local industry executive said on Thursday.

Smelters in Henan have idled around 700,000 tonnes of primary aluminium smelting capacity since June, more than 15 percent of the total annual capacity of 4.6 million tonnes, thanks to prevailing low prices at the time in China, the world's top aluminium-producing nation.

The temporary closures in Henan, coupled with Beijing's plan to phase out outdated smelting capacity nationwide, pushed down China's month-on-month aluminium production in the past three months after a record in May.

Beijing aims to phase out a total of 339,000 tonnes of outdated aluminium capacity this year, including more than 100,000 tonnes in Henan, and is encouraging local governments to restrict electricity supplies to power-hungry smelters as part of its efforts to cut energy intensity 20 percent from the 2005 level by the end of this year.