Yunnan adds 1 million tonnes of aluminium with 4 smelters back online
According to our report from China's Yunnan province, the region has added 1 million tonnes of primary aluminium with the restart of four aluminium smelters. Out of which, Yunnan Aluminum Co. Ltd. is the most significant producer, with 600,000 tonnes added so far. Henan Shenhuo Coal & Power Co. Ltd. and Hongtai Aluminium have added 380,000, while Qiya Aluminium has contributed just 40,000 tonnes.
In the meantime, the insufficient rainfall in Sichuan province has resulted in a reduction in aluminium production. Our sources indicate that two aluminium smelters have been instructed to decrease their output, albeit the total reduction amounts to only 50,000 tonnes when combined.
According to our analysis, a significant amount of aluminium still needs to be included in the Chinese aluminium inventory from the Yunnan province and estimate that over 1 million tonnes are awaiting resumption of production.
The summer season has brought a slowdown in the China domestic aluminium market, as seen by the decline in liquid metal transfers and the rise in ingot casting. This trend indicates that metal prices are likely to move downward. However, despite this situation, profitability remains strong, leading to minimal opposition to decreased prices based on production costs.
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