Roughly 6 million tonnes per year of alumina refinery capacity in China has been curtailed due to the 2019-nCoV coronavirus pandemic, opening opportunities for market participants in the West to sell extra material to the East asian country, a senior executive at Norsk Hydro has said.
The shortfall has arisen with Chinese smelters continuing to produce material as normal despite the effects of the measures being used to combat the coronavirus, John Thuestad, the company's executive vice president, bauxite and alumina, told Fastmarkets in an interview.
"Our impression is that Chinese smelters have continued to produce at 100% of capacity. However, various sources point to approximately 6 million tonnes of alumina refinery capacity having been curtailed," he said.
"This has led to higher alumina prices and the possibility for Western [market participants] to sell additional cargoes to China. We're expecting Chinese refineries to gradually increase production as long as prices stay above their marginal cost," he added.
Many Chinese alumina refineries reduced production after coronavirus-related transportation difficulties restricted their supplies of essential raw materials such as coal and bauxite.
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