August 12, 2019 / 12:48 PM / 7 days ago

China Hongqiao says aluminum plants not damaged by floods, production normal

BEIJING (Reuters) - China Hongqiao Group, the world’s top aluminum producer, said on Tuesday it was operating as normal after Typhon Lekima lashed its home province of Shandong at the weekend and cause severe flooding.

“The facilities are not damaged by the typhoon. There was flooding outside the factories but no actual facilities damage,” Honqgiao said in an email.

“Since Hongqiao is a big company and with numerous pre-emptive measures and plans, the company’s operation was not affected,” Hongqiao said.

In a seemingly contradictory statement issued on Monday, Weiqiao Pioneering - owned by the same Zhang family that controls Hong Kong-listed aluminum arm Hongqiao - said a wall of one of the Shandong-based group’s aluminum plants was “immediately overwhelmed” by water flooding from the Xiaofu river at 11 p.m. local time (1500 GMT) on Sunday.

Hongqiao and Weiqiao are often taken in China to be referring to the same aluminum-producing group.

Floodwaters came rushing into the plant area “like a wild horse,” reaching a height of two meters in the deepest places, said the Weiqiao statement on its official Wechat account.

Appearing to report on a separate incident, the Weiqiao Wechat post also said a subsidiary had quickly moved to suspend production in order to protect smelting facilities.

“However, the disaster caused by the flood does not stop there,” it said. The flooding “severely threatened the aluminum subisidiary on the west side of Yuehe 6 Road,” it said.

The post was accompanied by images of people wading through knee-deep water on the road.

In a separate Wechat post, Christine Wong, assistant executive director at Hongqiao, thanked everyone for their concern and said the company’s production was normal.

Two Shandong-based industry sources said on Monday that logistics were proving difficult for smelters in the wake of the floods, even if production was not affected.

The most active aluminum contract on the Shanghai Futures Exchange rose as much as 1.9% to 14,285 yuan ($2,022.48) a tonne on Tuesday, its highest since May 29.

Typhoon Lekima, which caused major travel disruption, made landfall in China early on Saturday in the eastern Zhejiang province, with winds gusting up to 187 kmh (116 mph), before traveling north through Shandong and off the coast. The death toll in eastern China rose to 44 on Monday morning.

Reporting by Tom Daly and Yilei Sun; Additional reporting by Mai Nguyen in SINGAPORE; Editing by Kirsten Donovan and Tom Hogue

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