CHINA Zhongwang Holdings Co., a maker of aluminum products, said Friday it had been notified of “severe difficulties” at two subsidiary companies, as Chinese prices for the metal hit a 15-year record high.

Liaoyang Zhongwang Superior Aluminium Fabrication Co. and Liaoning Zhongwang Group Co. are facing problems due to “major losses and business hardship,” Zhongwang said in a statement.

Zhongwang is the world’s second-biggest manufacturer of aluminum extrusions widely used in the transport, construction and electronics industries. It needs to purchase aluminum ingots in order to make its products.

Aluminum ingot prices on the Shanghai Futures Exchange rose as much as 3.9 percent in night trading Friday to 24,700 yuan (US$3,834) a ton, the highest since May 2006, as curbs on electricity usage by smelters leave the market fearing a shortage of supply.

Zhongwang said in its 2020 annual report in April it had “not entered into any aluminum ingot forward contracts to hedge against aluminum ingot price fluctuation risk.”

Furthermore, Zhongwang is headquartered and has a major production base in the city of Liaoyang, in China’s northeastern province of Liaoning, one of the regions hardest hit by widespread power shortages that have hobbled industrial output.

Trading in Zhongwang’s shares has been suspended since Aug. 30 pending publication of inside information and the company’s financial results for the first half of 2021.

(SD-Agencies)