Jun 17

A new 60-day production restriction started from 1st March

Mar. 05, 2019 – Local government in Sanmenxia, Zhengzhou, Henan Province, one of the main industrial districts for white fused alumina, brown fused alumina and other corundum minerals, announced a new round of production capacity restriction actions starting from 1st, March, lasting for 60 days.

During this period, peak hour production restriction would be the main action that is expected to be implemented uninterruptedly, and electric power control will be taken as the measure so as to make sure production restriction conducted. Besides, overall production stoppage will be completely implemented during days of worst air pollution.

By the end of February, a total of 14 rounds of environmental governance and inspection have been implemented by local governments in Sanmenxia since 2017, with about half of those actions carried out in the last 8 months of this period, during which production facilities change from stoppage to limited production and then to stoppage again. The same situation happens to other regions in Henan province and also parts of Shanxi province, which has seriously affected supply for many refractory minerals.

China government has shown its determination to improve the environment by actions in the past 2 years, followed by the firm attitudes from local authorities in different cities of the country, which is impossible to change until the environment in China would have been improved. Refwin quoted unnamed sources, local authorities in Zhengzhou are doing works to release some high quality capacity by clarifying differentiated environmental policies to local smelting facilities, calcination and process plants i.e. “one plant, one policy”, by which it regulates what condition and what extent can a plant conduct production, which means some licensed plants are able to release more capacity even under severe air polluted conditions. This sounds to be a good news at current stage of supply risk.

In the winter of 2018-2019, it’s found that the overall market price for WFA, BFA, calcined bauxite shows no significant changes (calcined bauxite for some grades increased for dozens of yuan) in China market, although those minerals are all in extreme shortage of supply. The reason mainly lies in the depression of demands both from domestic and global market.

It seems that the market has entered a relatively stable status in China for refractory mineral under environmental protection implementation, in which various minerals are find their price position in the new market situation, at which it’s hard for them to get sharply up or down in price.

In 2019, the situation of bauxite ore ban plays a very key role in 2019 for alumina based refractory minerals, just like the dynamite ban plays the same very important role to magnesia-based refractory minerals. We have seen the price down of DBM and FM, after dynamite was available to parts of mine facilities in this year. The situation may turns to be clearer after NPC and CPPCC.

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