Maintenance - new way to describe capacity cuts

Readers of our Weekly report will have noticed that there is a new trend developing in China’s aluminium smelters. Instead of cutting capacity - a decision which brings with it a risk that the local government will veto the move - Chinese smelters are now announcing maintenance outages.

Chalco’s Huaze plant in Shanxi province is an example. They are taking 100 pots off line for maintenance. Anyone who has worked in a smelter will tell you that your maintenance team have no hope of working on 100 pots at a time. Ordinarily a pot going down for maintenance is physically lifted out of the line once it has cooled, and transferred to a maintenance area. A typical maintenance area might be big enough to house 4, 6, 8 or even 10 pots at a time. But you also need the maintenance crews who know what to do.

And that’s another point about the maintenance euphemism. Exactly what sort of maintenance would 100 pots need? There are no moving parts in a pot - unless you count the inch by inch lowering of the anode into the pot, or the workers removing the covers. Usually the pot is taken out of service to replace the cathode and brick linings. But here again, the euphemism doesn’t work. Nobody carries 100 spare sets of cathode blocks and 100 spare sets of refractory and other linings.

As I mentioned earlier, the beauty of saying that the pots are out for maintenance is that the proprietors don’t have to explain to the local government as to why they are cutting capacity.

In the past week, two other plants have closed capacity for maintenance reasons.

That means that in the last few weeks, a total of 11 plants have cut capacity. That’s good news for the over-supply situation in China, and therefore good news for companies like Alcoa and Century. But don’t get too excited - Xinjiang’s Jiarun smelter just added another 500Kt of capacity.

By the way, if you want to be the first to know about capacity cuts and everything else happening inside the aluminium industry, make sure you subscribe to our weekly reports. Contact us for more information, or find the link in the Products section in our website.