As the weather becomes colder and the days become shorter, one cannot help but notice that winter is coming. The winter season, especially in December, is a joyous one. Most European and North American businesses are in full gear and are preparing for an increase in sales and production.
In contrast, winter in China this year brings with it a different mood than in North America and Europe. Major production disruptions are expected in the regions around Beijing and Tianin, since President Xi Jingpin is vowing to replace the polluted, smog filled skies with blue ones. While this seems to be a positive development for the environment in China, it will inevitably mean disruptions to supply chains and a reduction in output in many industries that rely on China to supply goods between December and March, a period in which pollution peaks due to coal-fired heating.
Xi Jingpin’s pronouncement comes as no surprise to industry analysts. The winter cuts are part of China’s war on smog, which can be extremely high over the winter months. The new ministry of environment has been cracking down on pollution, and forcing non-complying factories to shut down since last June. Ministry inspectors are still investigating many factories in Beijing and the surrounding area to make sure they are operating in authorized locations, have obtained the proper certifications, and are meeting emission standards.
The aluminum industry will be one of those industries most affected by the new winter regulations in place. Our industry analysts are predicting a cut of 30% in aluminum production. What’s worse is that aluminum, a green metal, used by many automotive makers, is made using coal power in China. In China, coal is deemed the country’s biggest environmental enemy.
Implications of Regulations in China on Aluminum Production
Despite these predictions, the long-term impact of the closing factories is still unclear and is leaving analysts and consumers wondering how the aluminum market will be affected.
Indeed, China is the world’s largest producer of aluminum. It manufactures more than half the world’s aluminum and produced a record volume last year of almost 32 million tons. Shutting down their aluminum smelters will inevitably put the world’s supply balance of aluminum into a deficit. With no definite answers and numbers regarding winter curtailment, the price of aluminum and certain smelting processes is surging.
Mitigating the Hit on Aluminum Supply
Consumers of aluminum might wonder if it is possible to mitigate the impact that these events in China will have globally on the aluminum supply. Producers do have cushions in place to minimize the disruptions as much as possible, such as expanding production before the disruptions take place in December. But this will come at a cost to the purchaser since Chinese producers are not conducting business between December and March and need still to cover overhead costs.
Eccomelt, an economical recycled A356.2 substitute from aluminum wheels, remains an excellent option for consumers. In anticipation of this increased demand for aluminum, Eccomelt has increased production and inventory in both their U.S. and Canadian plants. We are committed to helping consumers source quality aluminum alloys for fair prices.
Discover Eccomelt Quality – A Direct Recycled Substitute for A356.2
Eccomelt is a division of House of Metals Co. Ltd., founded in 1953 and has achieved recognition as being one of Canada’s best-known aluminum processors.
Alongside Alcan R&D, we have developed an eco-friendly substitute for A356.2 from aluminum wheels. Our product is the material of choice for many consumers because it is chemically pure and environmentally-friendly. Its shredded form has achieved higher melting rates than Ingot, Sow or T-Bar. Environmental testing has also proven the process eliminates all coatings. We manufacture in Canada and the US but can deliver globally.
Our customer support specialists would be delighted to speak to you about your aluminum alloy needs. For more information about our products, please visit our about us page. Alternatively, please contact us at (888) 356-9557 or fill out our Contact Form for more information on our Eccomelt356.2 product.