China's aluminium production continued to increase in December 2024, backed by newer production capacity and increased operating rate like the last month. According to the data recently published by the National Bureau of Statistics, China's aluminium output in the final month of 2024 rose month-on-month as well as year-on-year by 1.62 per cent and 4.2 per cent, respectively.
Image Source: Made-in-China
China's aluminium output in December stood the highest in the final quarter of 2024, at 3.77 million tonnes, with daily production averaging 121,612 tonnes. Although the monthly output in December stood higher than 3.71 million tonnes in November, the daily production decreased by 1.66 per cent M-o-M from 123,667 tonnes to 121,612 tonnes.
China's total aluminium production in the fourth quarter of 2024 amounted to 11.2 million tonnes, up by 1.27 per cent from 11.06 million tonnes in Q3 2024.
The rapid growth in China's domestic primary aluminium production will likely bring the total output at the end of 2025 to a record high, close to the 45 million tonnes cap imposed by the government to reduce emissions and address excess supply.
Already, at the end of 2024, China's primary aluminium production totalled 44.01 million tonnes, up by 5.82 per cent from 41.59 million tonnes in 2023.
According to the Shanghai Metals Market, China's existing aluminium capacity at the end of December 2024 was approximately 45.71 million tonnes, with an operating capacity of around 43.53 million tonnes, and the industry's operating rate increased by 2.49 percentage points Y-o-Y to 95.38 per cent. However, on a month-on-month basis, both operating capacity and operating rate slightly declined from 43.68 million tonnes and 95.56%, respectively, but offset by the ramp-up of new projects at a smelter in Xinjiang.
The monthly downfall could be attributed to production cuts at multiple smelters in Sichuan due to losses incurred by high alumina prices on the Shanghai Futures Exchange, standing at RMB 5,348 per tonne at the end of December 2024, close to its record high of RMB 5,690 per tonne on Dec. 4. Technology update in some of the Guangxi smelters was also an essential factor for the capacity and operating rate declines in December. Guangxi aluminium smelter's pot maintenance was initially estimated to affect the capacity of 100,000 tonnes per year, resulting in a slower rise in China's operating capacity.
Antaike, the state-backed research house in China, calculated that about RMB 687 per tonne of losses were faced by Chinese smelters.
Entering January 2025, domestic aluminium operating capacity is expected to remain stable with no further cuts, but the earlier cuts are likely to have a continued impact. The profitability of smelters is estimated to turn positive with the ongoing downfall in alumina prices, currently standing at RMB 4,308 per tonne, thanks to supply recovery on the withdrawal of force majeure by Rio Tinto on its alumina exports from Gladstone refineries.
Ahead of the Chinese New Year Holiday, SMM projects the proportion of liquid aluminium to decrease to around 70 per cent in January due to lower billet production on a weaker downstream demand during the holidays.
For a long-term forecast through 2025 and an in-depth Chinese market analysis, read AL Circle's forthcoming comprehensive report: "Global Aluminium Industry Outlook 2025".
Information source: NBS and SMM
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