China’s primary aluminium records 1.8% lower output during Jan-Aug on growing costs and losses

According to the data from Shanghai Metals Market, China in the month of August produced 3.11 million tonnes of primary aluminium, up 1.5 per cent from 3.063 million tonnes in the corresponding period last year. But the overall output during January-August still remained down by 1.8 per cent to 24.05 million tonnes from 24.48 million tonnes year-on-year.

Until the end of August, the primary aluminium capacity in operation across China was about 37.36 million tonnes while about 4.54 million tonnes remained idle. Operating rates in August came in at 89.2 per cent, down 0.3 percentage point from July as costs and losses grew.

Some capacities with high costs in Gansu, Shaanxi, and Henan provinces were shut permanently during the period which further bolstered the shrink of operating volumes.

Commissioning of new capacities is likely to remain slow in the short term. Most of the new capacities are located in Inner Mongolia and Guangxi. Newly-commissioned capacities are unlikely to exceed 200,000 tonnes across the country in September, SMM expects.

Shanghai Metals Market also estimates that the total output in September is likely to come in at 3.03 million tonnes, up 3.8 per cent from 2.914 million tonnes in the corresponding period last year. This small increase in output in September 2018 would lead the annual growth into positive territory; the annual change for the January-September period is likely to be in a contraction of 1.2 per cent.