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Surging aluminum output bad news for consumers
Edited by : AL CIRCLE
2 min read
Reuters reported that global aluminum output surged to a fresh all time high of 118,800 tonnes per day in April after a slight drop in March.
Global production was running at an annualized 43.35 million tones last month, representing a near million tonne increase from the previous record of 42.39 million tonnes in February.
According to figures released by the International Aluminum Institute, production in both China and the rest of the world rose MoM. Outside of China annualized production of 25.70 million tonnes is closing in on the previous output peak of 25.77 million tonnes seen in April to May 2008.
The twin drivers remain fast rising output in the Gulf area and capacity restarts in other countries, particularly North America, where Alcoa's 200,000 tonnes per year of restarts are only just starting to hit the figures. That should maintain the upwards momentum through the next couple of months, even if right now there is no sign of Alcoa or any other Western producer initiating a second wave of large scale reactivations.
UC RUSAL's announced cutbacks in Ukraine and Russia are not significant enough to do anything more than dent this uptrend. That really means that it is Chinese run rates that will determine MoM changes in global output in the coming period.
Chinese smelters are facing pressure from what seems set to be a particularly tough summer for power availability as well as a renewed battle with Beijing about excess capacity in the sector. April's near one-million tonne jump in annualized national production is a timely reminder of just how much excess capacity there is in China and underlines why the government has set its sights, again, on trying to control what is a major drain on power availability.
After a blanket ban on building new capacity, Beijing seems set to tighten the screws further with another tilt at the system of tax rebates on exports of product. This makes sense. There is a lot of circumstantial evidence that China has been running a national deficit of primary metal but a surplus of fabricated product.
Global production was running at an annualized 43.35 million tones last month, representing a near million tonne increase from the previous record of 42.39 million tonnes in February.
According to figures released by the International Aluminum Institute, production in both China and the rest of the world rose MoM. Outside of China annualized production of 25.70 million tonnes is closing in on the previous output peak of 25.77 million tonnes seen in April to May 2008.
The twin drivers remain fast rising output in the Gulf area and capacity restarts in other countries, particularly North America, where Alcoa's 200,000 tonnes per year of restarts are only just starting to hit the figures. That should maintain the upwards momentum through the next couple of months, even if right now there is no sign of Alcoa or any other Western producer initiating a second wave of large scale reactivations.
UC RUSAL's announced cutbacks in Ukraine and Russia are not significant enough to do anything more than dent this uptrend. That really means that it is Chinese run rates that will determine MoM changes in global output in the coming period.
Chinese smelters are facing pressure from what seems set to be a particularly tough summer for power availability as well as a renewed battle with Beijing about excess capacity in the sector. April's near one-million tonne jump in annualized national production is a timely reminder of just how much excess capacity there is in China and underlines why the government has set its sights, again, on trying to control what is a major drain on power availability.
After a blanket ban on building new capacity, Beijing seems set to tighten the screws further with another tilt at the system of tax rebates on exports of product. This makes sense. There is a lot of circumstantial evidence that China has been running a national deficit of primary metal but a surplus of fabricated product.
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