Yunnan to improve power supply to aluminium smelters in the province: Chinese experts

On June 13, 2023, an international media house reported that Chinese experts attached to the situation of the aluminium industry in China's southwestern Yunnan province revealed energy supply to aluminium smelters would be increased later this month, enabling a portion of the capacity in the drought-stricken area to resume operations.

After deficient rainfall impacted hydropower generation in Yunnan, China's fourth largest electrolytic aluminium-producing region, smelters have had to reduce production twice since last September 2022, lowering operating rates by approximately 40 per cent at some companies. Hydropower contributes to almost 70 per cent of the total electricity supply in the province, which has a potential of 5.25 million metric tonnes of aluminium production.

The expert said, "Now the conditions allow, we will gradually resume the power supply. Increased rainfall this month has helped to relieve the restriction in the hydropower supply."

He also stated that the resumption would occur in late June. However, the exact amount of power to be restored and the date is still being worked out and will be determined by weather and market demand.

On June 12, a senior employee at a Yunnan-based aluminium smelter said the business received verbal direction from the power grid to prepare to restart operations.

The expert stated the aluminium smelters would be allowed to recover 20 per cent of the paused capacity, with further resumption dependent on the future power supply.

Su Yanbo, a researcher of electrolytic aluminium at Beijing Aladdiny Zhongying Business Consulting, stated Yunnan's power cuts have reduced aluminium capacity by 1.65 million tonnes.

Su said, "It is anticipated around 1 million to 1.3 million tonnes to resume once electricity curbs ease. But as concerns over power supply in the year's second half linger, producers will slow down or even delay production resumption."

"It costs up to $419,556.95 to restart a 500 KA graphitized cathode electrolyzer. It would take about eight months of stable production to recover those costs based on the current profit of around RMB2,000 per tonne."