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A consultant for China Hongqiao Group said Thursday that the second phase of the company's alumina plant in Indonesia should start by the end of this year. Alumina prices have now touched a two-year high.
The first phase of Well Harvest Winning's alumina smelter on Borneo Island was commissioned in 2016 with an annual capacity of 1 million tons. Hongqiao's original plan was to complete the second phase by the end of 2020.
"The second phase of this Indonesian project - which could increase capacity by 1 million tons - should be commissioned later this year," said Ron Knapp, a consultant for Macrobridge International, in a Fastmarkets International Aluminum video conference.
Knapp, a former secretary general of the International Aluminium Institute (IAI), noted that Macrobridge currently has about 16 million tons of annual alumina production capacity, mostly in China.
COMEX alumina futures touched $320 a tonne on Wednesday, the highest since July 2019, following a fire at the Jamalco refinery in Jamaica last month. Chinese alumina prices SMM-AVEG-ALM topped 3,000 yuan ($465) a tonne on Thursday, also hitting a more than two-year high due to tight supply.
Rising alumina prices caused aluminum prices to soar to a 10-year high this week.
Hongqiao is shifting nearly one-third of its 6.5 million tons of annual aluminum capacity from Shandong to the southwestern Chinese province of Yunnan, Knapp said, adding that the first phase of the Yunnan project starts in 2020, and three more production lines in the second phase will be transferred from Shandong next year.
He added that the company plans to expand aluminum sales into rail and aerospace in the future as it focuses its Shandong operations on downstream applications and shifts midstream processing to Yunnan.
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