China’s primary aluminium production stands 2.9% higher Y-o-Y as Yunnan resumes curtailed capacity

According to the National Bureau of Statistics (NBS), China’s primary aluminium production grew year-on-year in June 2023 as smelters resumed operations in southwestern Yunnan province after the ease of local power usage restrictions.

As per the data released by NBS, China produced 3.46 million tonnes of primary aluminium in June, which reflected an increase of 2.9 per cent from a year ago. The daily average output amounted to 115,333 tonnes, up by 4.54 per cent from 110,323 tonnes in May.

Yunnan began lifting power usage restrictions late last month following more rains in the region as that could generate a higher amount of hydropower. Around 500,000 tonnes of annual capacity returned to operations in the second quarter, according to Chen Xinlin, a senior consultant at Metals & Mining at Wood Mackenzie.

Smelters, which cut their output due to power curbs last September, have raised production amid a high profit of RMB 4,000 per tonne last month. The profit rose because lower thermal coal and aluminium prices made energy-intensive metal production cheaper.

Backed on the increased production, primary aluminium supplies improved while demand remained low, which is likely to lead to growing inventories in the coming weeks. In Q3, Yunnan smelters are expected to restart most their curtailed capacity as the traditional monsoon season sets in.

China’s total primary aluminium production amounted to 20.16 million tonnes in H1 2023, up 3.4 per cent from the corresponding period of 2022.