Covid outbreak in China province hits aluminium production

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A new COVID-19 outbreak in Baise in South China’s Guangxi Zhuang Autonomous Region, a major domestic production hub of aluminum, is expected to tighten supply and lift prices amid booming demand and low inventories, Global Times reported.

The city accounts for 5.6 per cent of China’s total production of electrolytic aluminum, and interruptions to production will push up prices for raw materials upstream, along with other factors, industry insiders said.

Production in Baise has been suspended amid a citywide lockdown for epidemic prevention, according to industry sources.

Another person with a local aluminum company said the production suspension drove up prices by “hundreds of yuan per tonne” in a single day on Monday and Tuesday.

Baise’s annual alumina production capacity is up to 10 million tonnes, or 13.8 per cent of total domestic capacity. Electrolytic aluminum production capacity in the city takes up to 80 per cent of the whole figure for Guangxi, and 4-5 per cent of China.

Booming demand coupled with the traffic controls in Baise are likely to mean lower inventories and higher prices.

China is the world’s largest electrolytic aluminum producer with output accounting for over half of the global total, and it has shown rapid growth in recent years, industry data showed.

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