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21 OCTOBER 2016 AL CIRCLE

Average global primary aluminium output rises 1.2% YoY in September: IAI

EDITED BY : DIPANWITA GUPTA 2MINS READ

Average global primary aluminium output has risen 1.2 per cent year-over-year in September, driven by enhanced production by Chinese smelters, showed data released by the International Aluminium Institute (IAI) on Thursday. The growth reflected a clear reversal of trend that has prevailed through the current financial year, with China topping the list of aluminium producing countries globally. Output of the white metal in the World ex China has dropped 2 per cent month-on-month, with declines recorded in almost all aluminium producing regions.

The global daily average output of aluminium surged at 164,600 tonnes from 159,800 in August. In China, September output stood at 2.75 million, the highest in the past 15 months.

"The rally in Shanghai aluminium prices so far this year has improved profitability and is encouraging restarts. There are also ongoing additions to capacity," observed Caroline Bain, senior commodities economist at Capital Economics in London.

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In 2015, several Chinese smelters shut millions of tonnes of capacity weighed on by mounting losses, which eventually bolstered prices to a 13-month peak in August from an all-time low in January.  This year, so far, as much as 1.8 million tonnes of capacity has been restarted, according to industry sources.

"Other than the restart volume, new (Chinese) capacity reached 2.9 million tonnes this year. Based on our record, there will be another 1.3 million tonnes of new capacity entering the market," said Paul Adkins, managing director of Beijing-based consultancy AZ-China.

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China’s monthly aluminium output is expected to log a steady growth rate in the short term till the time a supply-side crunch is felt which is likely due to a nascent weakness in the property sector. According to analysts, the rise will lead to benchmark aluminium prices falling to $1,550 a tonne by the end of the year.

Global primary aluminium production totalled at 4.937 million tonnes, up 1.2 per cent from the corresponding period previous year, while North American output fell 11 per cent to 325,000 tonnes, IAI data revealed.

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EDITED BY : DIPANWITA GUPTA 2MINS READ

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