Yunnan aluminium industry is in woes due to the dry season, with nearly 400,000 tonnes of output cut

Beijing Capital Futures released a report this month stating that a power shortage enforced restrictions on electricity consumption since November 2023, when the dry season started, causing aluminium companies to gradually cut production. By the end of February, the report showed that local aluminium production had been reduced by about 400,000 tonnes.

On Friday, March 22, the Ministry of Water Resources initiated a Level IV emergency in response to drought in Yunnan and Sichuan provinces.

Some aluminium companies in Yunnan are resuming production but at a slower rate due to power supply concerns. They aim to reach full capacity by May 2024.

However, the ministry is concerned that if production of electrolytic aluminium resumes on a large scale ahead of schedule, the local electricity shortage will worsen, given that rainfall will most likely remain low in April and May, and thus, hydropower generation will be limited.