Resumption of Aluminium Production in Yunnan: Impact of Rainfall and Power Distribution

Metals – Aluminium production resumption plans in Yunnan

SMM expects that the increase in rainfall has resulted in increased hydropower generation in the Yunnan province in China. It is expected that the local government will issue a specific power load distribution notice on 15 June. As per the reports, aluminium smelters in Yunnan would be allowed to resume 20% of the halted capacity and further resumption will depend on future power supply. As of 12 June, installed aluminium capacity in Yunnan stood at close to 5.6mt (including 400kt to be transferred), while operating capacity was about 3.3mt, with roughly 2mt of capacity being idled.

 

 

As per the latest reports, Boliden halted operations at its Ronnskar copper smelter following a major fire incident at the facility located in Northern Sweden. The company further added that the plant’s electronic refinery has been completely damaged and needs to be rebuilt. Meanwhile, an initial assessment indicates that the main part of the smelter production can be resumed within a few weeks, however, it can take several years to bring back operations fully back to normal.

 

 

The smelter produced 218kt of copper last year. As for zinc, Boliden announced to temporarily halt production and exploration at its Tara zinc mine in Ireland and would place the mine into care and maintenance within the next month. The decision came as the mine had been hit by operational issues, declining zinc prices and high energy costs. It is Europe’s largest zinc mine with more than 2mt of ore being extracted annually.

 

Meanwhile, the latest LME COTR report shows that net bullish positions for copper increased by 3,104 lots for a second consecutive week to 45,549 lots as of last Friday. Among other metals, speculators increased their net long positions in zinc by 1,831 lots after declining for two consecutive weeks to 23,350 lots in the week ending 9 June. In contrast, speculators reduced their net long positions in aluminium by 1,725 lots for a third consecutive week to 106,991 lots as of last Friday.