By Min Zhang and Dominique Patton
BEIJING (Reuters) – Aluminium production in the southwest Chinese city of Baise, which has gone into lockdown after recent COVID-19 outbreaks, remains stable though transportation disruptions are starting to weigh, the local industry association said on Tuesday.
The city on China’s border with Vietnam in the Guangxi region has an annual aluminium production capacity of nearly 2.2 million tonnes, or some 5% of China’s total. It also possesses around 9.6 million tonnes of alumina capacity.
Baise has confirmed more than 100 locally infected COVID-19 cases in February and went into lockdown on Feb. 7.
“Aluminium production in our plant has not been affected yet,” said an official from Baise Yinhai Aluminium who refused to be named as he is not authorised to speak to media, echoing views from Chinaco’s Guangxi unit and Baikuang Group.
However, the Baise Aluminium Industry Association said that the lockdown had hindered companies’ transportation of raw materials and aluminium ingots.
That raised concerns of potential production cuts if the lockdown is prolonged, said a Beijing-based analyst, adding that the worries have offset the impact of sluggish seasonal demand as downstream sectors remain on new year holidays.
“Local governments are actively coordinating to issue passes for industrial firms… but the impact has not been eliminated,” the association said in a statement on its website.
State-backed research house Antaike noted the pandemic situation in Guangxi is limited, but any supply-side disruptions could move the futures market as aluminium inventories around the world are at relatively low levels.
Aluminium prices on the London Metal Exchange and Shanghai Futures Exchange scaled four-month highs on Tuesday.
(Reporting by Min Zhang, Dominique Patton and Beijing Newsroom; editing by Jason Neely)
