China’s aluminium smelters operating rates record strong in March’23, credit goes to 20.65 MT of installed capacity

According to the Shanghai Metals Market survey, China’s aluminium smelters operating rates in primary production hubs, including Shandong, Xinjiang, and Inner Mongolia, stood robust in March 2023. The amalgamated installed aluminium capacity in these three provinces was 20.65 million tonnes, nearly half of China’s total.

As of April 20, China witnessed 930,000 tonnes of aluminium capacity resumption and 212,000 tonnes of newly commissioned. Combining the two, China had an aluminium capacity of 1.14 million tonnes, which could almost negate the effects of the 1.2 million tonnes of aluminium capacity cut.

China’s aluminium production in March (31 calendar days) also showed an improvement of 10.35 per cent M-o-M from 3.09 million tonnes to 3.41 million tonnes. Total output in the first quarter grew 4.8 per cent Y-o-Y to 9.92 million tonnes.

Going ahead, China’s installed aluminium capacity is likely to increase further, with smelters in Yunnan resuming production once the dry season is over and power supply shortages are resolved.

SMM estimates another 2.63 million tonnes of aluminium capacity will resume later this year, and 1.57 million tonnes of new capacity to come into operation. As a result, capacity might shift to excess in the second quarter or second half of this year, weighing aluminium prices down.