Aluminium International Today
Chinese aluminium production is up by 10% this year
Edited by : AL CIRCLE
2 min read
China’s primary aluminium production totalled 1530.6kt in April, down slightly by 2.1% from March. In spite of the fall, however, daily output of primary aluminium averaged 51kt in the month, up from the previous month’s 50.4kt.
It seems the production cutbacks by smelters in Henan Province have been cushioned by production ramp-up at smelters in other places.
Primary production totalled 6.09Mt in Jan-April of 2012, up 10.83% y-o-y. The increase was contributed mainly by newly built capacity in northwest China. CNIA’s data show that primary output in Xinjiang surged 176.06% y-o-y in Jan-April to 179.2kt, while the output in Ningxia rose 61.21% to 502.4kt.
There has been an aluminium investment boom in Xinjiang, where coal resources are redundant, with planned smelting capacity at over 13Mt/y by 2015. However, it is unclear as to whether all this planned capacity will be actually built. Moreover, it usually takes longer for projects to complete construction in Xinjiang due to a lack of labour and unfavourable weather conditions there.
At present, capacity in operation in Xinjiang is only 800-900kt/yso, as yet, the output in Xinjiang will not have a significant impact on the overall supply this year, or even next year.
Chinese imports of primary aluminium declined in April, down 36.6% m-o-m to 40.3kt. Even though, imports were still strong, up 2166.1% y-o-y. From Jan-April, China imported 226.6kt of primary metal, up 159% y-o-y, and exported 42.6kt, up 274.7% y-o-y, making a net import of 182.6kt, or 106.5kt more than the level for the same period last year.
The SHFE/ LME arbitrage price difference has kept widening from RMB 304/t in February this year to RMB 1437/t in April. The widening differential, coupled with the seasonal pickup in domestic demand, suggests Chinese primary imports would increase again in May and June.
On the demand side, semis production increased 2.7% m-o-m in April to 2435kt. This brings the Jan-April total production to 8.41Mt, up 12.23% y-o-y. Semis exports totalled 240.9kt in April, down slightly from the previous month’s 243.5kt. At much higher aluminium prices in China relative to the LME, China’s semis exports are expected to fall further.
It seems the production cutbacks by smelters in Henan Province have been cushioned by production ramp-up at smelters in other places.
Primary production totalled 6.09Mt in Jan-April of 2012, up 10.83% y-o-y. The increase was contributed mainly by newly built capacity in northwest China. CNIA’s data show that primary output in Xinjiang surged 176.06% y-o-y in Jan-April to 179.2kt, while the output in Ningxia rose 61.21% to 502.4kt.
There has been an aluminium investment boom in Xinjiang, where coal resources are redundant, with planned smelting capacity at over 13Mt/y by 2015. However, it is unclear as to whether all this planned capacity will be actually built. Moreover, it usually takes longer for projects to complete construction in Xinjiang due to a lack of labour and unfavourable weather conditions there.
At present, capacity in operation in Xinjiang is only 800-900kt/yso, as yet, the output in Xinjiang will not have a significant impact on the overall supply this year, or even next year.
Chinese imports of primary aluminium declined in April, down 36.6% m-o-m to 40.3kt. Even though, imports were still strong, up 2166.1% y-o-y. From Jan-April, China imported 226.6kt of primary metal, up 159% y-o-y, and exported 42.6kt, up 274.7% y-o-y, making a net import of 182.6kt, or 106.5kt more than the level for the same period last year.
The SHFE/ LME arbitrage price difference has kept widening from RMB 304/t in February this year to RMB 1437/t in April. The widening differential, coupled with the seasonal pickup in domestic demand, suggests Chinese primary imports would increase again in May and June.
On the demand side, semis production increased 2.7% m-o-m in April to 2435kt. This brings the Jan-April total production to 8.41Mt, up 12.23% y-o-y. Semis exports totalled 240.9kt in April, down slightly from the previous month’s 243.5kt. At much higher aluminium prices in China relative to the LME, China’s semis exports are expected to fall further.
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