China keeps analysts wondering about its aluminium production cut figures

<p>It is almost certain now that China is slashing production in aluminium smelters located around Beijing ahead of the winter heating season. Recently, the government also initiated a series of illegal capacity cuts to check pollution caused by alumina refineries and aluminium smelters in major production hubs. The two-pronged strategy with one action already implemented and the other one- announced, sent out a message of widespread supply-side readjustment in the global market which buoyed up aluminium prices at London Metal Exchange. &nbsp;But, it seems that not all things that are visible are open at China&rsquo;s end, at least, that is what the analysts opine.</p> <p style="text-align: center;"><img style="vertical-align: middle;" src="http://www.alcircle.com/uploads/images/Chinaalu_july31.jpg" alt="News" width="460" height="287" /></p> <p>Senior Metals Columnist at Thomson Reuters in London, UK, Andy Home writes, "China's production of primary aluminium hit a record high of 97,700 tonnes per day in June. That was equivalent to an annualized run rate of 35.7 million tonnes and represented 56.5 percent of global output, also a fresh high. These are the official figures from China's Nonferrous Metals Industry Association (CNIA) published by the International Aluminium Institute."</p> <p>"Counting aluminium production should be a straightforward statistical exercise. Aluminium smelters are big and in the case of the new generation of plants in China very big indeed. But the official numbers, which is all most of us get to see, raise more questions than they answer. It's not just CNIA's habit of occasionally throwing large historical revisions into the mix, it's the monthly volatility that has become a running feature of the numbers," he notes.</p> <p>{googleAdsense}</p> <p>Andy Home finds in senior industry specialist Paul Adkins of the AZ China consultancy a believer in the same theory. Adkins thinks, &ldquo;The official figures are diverging from reality in a different way. AZ China does its own production count and estimates actual daily production was 104,000 tonnes in June. It also thinks there was a similar-sized undercount in both April and May.&rdquo;</p> <p>&ldquo;The cumulative annual discrepancy based on the last three months would be around three million tonnes. The official figures, according to Adkins, speaking in the Reuters Global Base Metals Forum on Thursday, are "misleading to say the least",&rdquo; Home quotes.</p> <p>We are just past the first six months of 2017; H2 2017 is about to unfold with a lot of surprises as far as aluminium market movement is concerned. &nbsp;To get a fairly good understanding of the market in advance, read <a title="News" href="http://www.alcircle.com/primary_aluminium/newscircle/market/detail/28294/aluminium-outlook-for-h2-2017-chinese-aluminium-capacity-cut-to-drive-prices" target="_blank">Aluminium outlook for H2 2017: Chinese aluminium capacity cut to drive prices</a>. &nbsp;</p>