China’s primary aluminium production in October declined 3.82% YoY, despite a rise in operation capacity

According to Shanghai Metals Market, the production of primary aluminium in China came in at 2.995 million tonnes in October after declining year-on-year by 3.82 per cent. With this, the total output in the first ten months stood at 29.45 million tonnes, down 2.27 per cent from the same period last year.

SMM believes the production cuts due to accidents in August-September affected China’s primary aluminium output and capacity in October.

The domestic capacity in operation, however, rose to 35.39 million tonnes by the end of October, up 340,000 tonnes from the previous month. But the actual production it generated remained 119,000 tonnes lower year-on-year.

The slower pace of capacity recovery and new capacity commissioning could be one of the reasons for the slowdown in primary aluminium production, suggests SMM, while this trend is likely to continue in November as well. So, as per the SMM estimation, domestic primary aluminium production in November will likely come in at 2.92 million tonnes, down 1.32 per cent from November 2018.

According to SMM data, the consumption of primary aluminium also dropped in the first ten months of the year by 1.75 per cent from the corresponding period last year, indicated by the decline of 416,000 tonnes in primary aluminium inventories over the first ten months of 2019.

Weak property and car sectors kept the consumption of aluminium subdued. The monthly growth in demand remained marginal amid the ongoing restructuring of primary aluminium consumption.