Chalco predicts aluminum output to increase to 24.1 million mt in 2013

According to the Aluminum Corporation of China’s annual report, China’s primary aluminum output will likely increase to 24.1 million mt in 2013.

Chalco notes that most aluminum producers in China suffered losses last year due to aluminum overcapacity and depressing aluminum prices . Many aluminum projects are now under construction or planning, which are concentrated in Qinghai, Gansu, Inner Mongolia, Yunnan and Xinjiang where coal and water are abundant. Most of these projects are equipped with power plants, and this can help reduce aluminum production costs. As such, Chalco predicts that China’s primary aluminum output will likely hit 24.1 million mt this year.

Global primary aluminum output reached 47.06 million mt last year, up 3.20%, compared with 46.61 million mt in global aluminum consumption, also up 3.35%. China’s primary aluminum output grew 9.51% to 21.3 million mt and consumption also rose 10.00% to 21.45 million mt. Operating rates at aluminum producers in the world were 84% last year, higher than 78% in China. China produced 4.22 million mt of primary aluminum last year, up 7.9%.

Chalco lost RMB 3.09 billion in its primary aluminum segment in 2012 due mainly to continuously falling aluminum prices starting in 4Q 2011. Its aluminum prices slid 7% on average last year, causing gross profits from aluminum segment, its main business, to decline by RMB 6.6 billion.

SMM believes Chalco aims to reduce aluminum production costs by stepping up coal-electricity-aluminum integration in 2012.