China’s aluminium production in October 2024 (31 calendar days) saw a year-on-year increase of 1.69 per cent and a month-on-month rise of 3.58 per cent, attributed to capacities back to operations in early October after technical renovations. However, some smelters unexpectedly delaying capacity resumption did offset the country’s monthly output, found the Shanghai Metals Market.
The aluminium output hike in October could also be attributed to steady demand growth for downstream alloy products during the traditional peak season from September to October. In addition, China’s domestic primary aluminium price rally during October, reaching as high as RMB 21,080 per tonne, played a favourable role in metal production, providing the smelters an opportunity to make profits.
As per the survey result from SMM, China’s aluminium production in October 2024 stood at 3.702 million tonnes, up by 1.69 per cent M-o-M from 3.641 million tonnes and 3.58 per cent higher than 3.574 million tonnes.
SMM also learned the proportion of liquid aluminium rose 0.2 percentage points M-o-M and increased by 3.6 percentage points Y-o-Y to 73.93 per cent. The casting ingot production decreased 9.23 per cent Y-o-Y to around 965,300 tonnes.
The resumption of capacities from technical renovations in Sichuan and Guizhou and new capacities coming into operation in Xinjiang boosted China’s domestic production capacity to 45.56 million tonnes, with operating capacity standing at 43.62 million tonnes. The industry’s operating rate also increased to 95.74 per cent over the year but remained almost restrained compared to 95.96 per cent in the previous month. A replacement project in Inner Mongolia is also progressing steadily and is expected to boost China’s monthly aluminium production in November 2024.
The ongoing resumption and ramp-up of domestic aluminium capacities are expected to further ramp up the operating capacity in November, but technical renovations and the shutdown of smelters in Henan are likely to offset the growth rate, impacting about 70,000-80,000 tonnes per annum of capacity. SMM forecasts the annualised operating capacity of domestic aluminium to reach 43.77 million tonnes versus 43.62 million tonnes in October.
Production growth is also likely to be range-bound due to weaker demand for alloy products such as aluminium billets. The proportion of liquid aluminium is expected to adjust back to around 73 per cent. However, continued attention is needed on the resumption of aluminium production in various regions.
