China’s total primary aluminium output during Jan-Oct stands low Y-o-Y despite a growth in October production

According to the data shared by Shanghai Metals Market, China’s primary aluminium production for the month of October stood at 3.114 million tonnes, up 3.5 per cent from the same period last year. This grew overall production during January-October to 30.166 million tonnes but still stood lower by 0.8 per cent than the corresponding period last year.  

As of the end of October, there were about 37.48 million tonnes of primary aluminium capacity in operation across China and about 4.82 million tonnes of idle capacity. Operating rates dipped 0.3 percentage points from a month ago to 88.6 per cent.

New capacity continued to commission while old capacity continued being cut. Operating capacity, on the other hand, expanded since September after a steep contraction in July-August. SMM data shows over 1.5 million tonnes of primary aluminium capacity have been cut so far this year.

Newly-commissioned capacity, however, did not significantly boost their production of aluminium ingot as the process of starting primary aluminium production would deplete some molten aluminium supplies.

In November, aluminium producers who run in losses are likely to deepen their output cuts as they face higher costs in Gansu, Qinghai, and Henan while new capacity will come online in Inner Mongolia, Guangxi, and Yunnan. SMM expects China’s output of primary aluminium to come in at 3.03 million tonnes in November, standing 4.3 per cent higher compared to November 2017.