Smaller Smelters Agree Over Output Cuts

For those of you who are using metals in your products, or are speculating in the metals market, here is some news that you should pay attention to.

Smaller smelters agree over output cuts

With 20% of steel production offline for Olympic pollution concerns, it looks like other smelters are being taken down as well - but not because they are air pollutors.

China’s main zinc and lead smelters have agreed to cut output by 10 percent during the summer to ease power shortages ahead of the Olympics and prop up prices.

so, with AL prices already going up a few points after last weeks first round of cuts (that weren’t even targeted to the AL smelters), we now have our first official closures due to energy concerns.

Why that is important - that it is official - is simply that we have been unofficially seen the impact of the power outages with factory closures and power saving measures in the city.. and that was not enough.

and it also means that we will see more to come.

To learn more about the impact of the Olympic on business, please see my previous posts on the topic, and click here to learn more about China’s energy issues

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