China’s primary aluminium production begins 2024 with a 4.2% Y-o-Y growth, in line with SMM estimation

According to the Shanghai Metals Market survey, China’s domestic primary aluminium production welcomed the year in January 2024 (31 days) with a month-on-month restraint at 3.562 million tonnes, with the average daily output at 114,900 tonnes, the same as the previous month. 

On a year-on-year basis, China’s primary aluminium output recorded a 4.2 per cent growth from 3.42 million tonnes, as was predicted by SMM. While announcing the December 2023 output volume, SMM shared an estimate for January 2024 with a production of 3.56 million tonnes. 

In January, the operating rate of domestic aluminium processing enterprises declined slightly, and so did the output of aluminium billets and other products in the northwest, southwest and other regions. The aluminium liquid ratio in the industry also fell to about 70.46 per cent, down by 3.7 percentage points M-o-M and 11.2 percentage points Y-o-Y. 

The aluminium ingot production volume in the said month was 1.06 million tonnes, down by 24 per cent Y-o-Y. Xinjiang, Inner Mongolia, and Yunnan were the main domestic aluminium ingot production areas, producing 590,000 tonnes, which accounted for 55.7 per cent of the total output. 

Operation analysis

According to SMM survey, China’s domestic aluminium companies mostly maintained stable operations in January, with no suspension or resumption of large-scale production during the month. At the end of January 2024, China’s built-in aluminium production capacity remained at 45.19 million tonnes, as was in December 2023. The operating capacity also remained unchanged at 41.98 million tonnes, but the operating rate increased over a year by 3.9 percentage points to 92.9 per cent. 

However, some small and medium-sized primary aluminium producers, especially those in north China, suspended production and took CNY holidays. The downfall in ingot production and downstream pre-holiday stocking resulted in an inventory fall in January. SMM estimates the total domestic aluminium ingot inventory to reach about 550,000-600,000 tonnes on the last day before CNY in February, 750,000-800,000 tonnes on the first day after CNY, and 900,000-950,000 tonnes after CNY.

Production forecast

SMM predicts domestic aluminium companies will sail through February 2024 with stable operations, with production capacity likely to hover around 42 million tonnes. With a steady daily average production, aluminium output in February (29 days) is estimated to amount to 3.33 million tonnes, up by 7.9 per cent from February 2023 (28 days).

To know the forecast on China's primary aluminium production through the entire year of 2024, explore AL Circle's latest report titled 'Global Aluminium Industry Outlook 2024'.