China’s Feb'24 aluminium output falls 6.4% M-o-M on reduced production at downstream processing plants

According to the Shanghai Metals Market survey, China’s aluminium production in February 2024 (29 calendar days) stood at 3.333 million tonnes, up by 7.81 per cent year-on-year and down by 6.43 per cent month-on-month.

Despite a drop in monthly production, the daily average output stood steady at 114,900 tonnes, even in less number of days than the previous month. The decline in monthly production could be attributed to closed or reduced production at some downstream aluminium processing plants due to the Chinese New Year Holiday during February 10-15.

The share of aluminium liquid output fell by 6.1 per cent month-on-month but rose 1.6 per cent year-on-year to about 64.29 per cent. The domestic aluminium ingot output came in at around 1.19 million tonnes, up by 3.21 per cent year-on-year, buoyed by steady operations at domestic aluminium smelters.

Except a production halt in Inner Mongolia after power outage, there was no large-scale production suspension in February. At the end of the month, China’s domestic aluminium capacity stood at about 45.19 million tonnes, with operating capacity at around 41.99 million tonnes and the operating rate at 92.9 per cent, up by 4.8 per cent Y-o-Y.

For March 2024 (31 calendar days), SMM expects China’s alumiminium production to amount to 3.55 million tonnes, up by 4 per cent Y-o-Y but down from the output in January. So far, domestic demand recovered to an extent with the arrival of the traditional peak seasons, supporting the aluminium output. The share of aluminium liquid output in March is expected to rebound to above 70 per cent, up 6 per cent Y-o-Y.

However, due to a few factors like Inner Mongolia’s smelter shut down since the last month and a smelter’s production halt in Sichuan because of technical transformation, China’s domestic aluminium operating capacity may fall to 42.09 million tonnes in March.