China’s aluminium output to fall 2.6% in January 2022 despite 530,000 tonnes of new capacity into operation: SMM

According to the Shanghai Metals Market estimates, China’s aluminium production in January 2022 will drop by 2.6 per cent year-on-year to come in at 3.19 million tonnes. The daily average output will be 103,000 tonnes, up 600 tonnes month-on-month. The proportion of aluminium liquid in smelter’s product portfolio is estimated to be 64.1 per cent in the said month, down by 1.4 percentage points month-on-month but up by 0.8 percentage point on the year.

On the other hand, the operating aluminium capacity has continued to increase in January. A total of 530,000 tonnes of aluminium capacity has been put into operation across Wenshan in Yunnan, east Inner Mongolia, Guizhou, and Shanxi. But the output released was low in the said month.

As of January 28, 2022, the domestic operating aluminium capacity is standing at 38.22 million tonnes per year, while the installed capacity at 43.97 million tonnes per year, with the average operating rate at 86.9 per cent.

SMM has also estimated that some capacity in Yunnan, Inner Mongolia, and Guizhou will be resumed in February, and the capacity that started earlier would continue to accelerate production. As a result, the daily average aluminium output is likely to rise further to 105,000 tonnes, with domestic output around 2.94 million tonnes in total.

The domestic downstream consumption is estimated to decrease sharply in February due to the Chinese New Year holiday. SMM predicts the domestic aluminium ingot inventory will enter the accumulation cycle after the CNY, and the inventory may increase to 1.1 million tonnes by the end of February.