China’s primary aluminium production grows 9.5% in October; strong output amid weak domestic demand weighs on prices

The National Bureau of Statistics revealed China’s primary aluminium production in October 2022 increased by 9.5 per cent year-on-year, bolstered by the ease of power consumption curb than the previous year and growing exports. NBS data showed the country produced 3.45 million tonnes of the metal, marking a rise for the eighth straight month compared to 2021 numbers.

The daily average output in the said month was pegged at 111,290 tonnes, supported by higher consumption of primary aluminium to produce and meet overseas demand for Chinese aluminium products.

From January to October 2022, China exported 5.68 million tonnes of unwrought aluminium and aluminium products. That was up by 25 per cent year-on-year, cushioning domestic primary aluminium output.

In the first ten months of the year, China’s total production of primary aluminium amounted to 33.33 million tonnes – 3.3 per cent higher than the corresponding period in 2021.

The strong production amid weak domestic demand hobbled by tight COVID curbs weighed on aluminium prices. The most-traded December aluminium contract listed on the Shanghai Futures Exchange averaged RMB 17,805 per tonne in October, the lowest since April 2021.

The falling prices also squeezed producers’ profit margins. The average profit for China’s aluminium industry slumped by RMB 245 per tonne to RMB 825 per tonne, according to information provider Mysteel.