Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The world’s second-largest aluminum producer China Hongqiao plans to move an additional 1mn mt of smelting capacity from Shandong to Yunnan in an attempt to cut carbon emissions using hydropower instead of coal. 


According to media reports, the company had already committed to moving 2mn mt of capacity to Wenshan, Yunnan, with phase-1 development completed in September 2020. Now, Hongqiao plans to move a further 1mn mt in smelting capacity to Honghe, near Wenshan. Yunnan will soon hold 3mn mt of the company’s total 6.46mn mt. 


In fact, state-backed Chinalco – the largest aluminum producer – also owns a smelter in the region that uses hydropower. The power curbs in Inner Mongolia, along with green initiative pressures, have led to these drastic moves. However, for the remaining capacity in Shandong, China Hongqiao plans to start recycling aluminum at the smelter level, partnering with Scholz Group to do so. 


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