China's primary aluminium output rises 3% Y-o-Y in April

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On an on-month basis, last month's output increased by 0.5 per cent from March, Mysteel Global calculated based on the NBS data.

Daily production averaged 129,000 tonnes in April, representing a 3.1 per cent increase from the same month last year and a 3.8 per cent rise from March, according to Mysteel Global's calculation.

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The climb in output was largely driven by robust profitability in China's primary aluminium sector, market analysts said. Mysteel's survey showed that during April, the average profit margin enjoyed by smelters when selling their semis rose by 1.4 per cent on month to RMB 8,947 per tonne (USD 1,314 per tonne), the highest level since the survey was first conducted in early 2019.

Although production costs also rose during the month, growth in Chinese primary aluminium prices outpaced cost Increases, further expanding industry profit margins, analysts added. Mysteel assessed the weighted average spot price for primary aluminium ingots with a minimum purity of 99.7 per cent at RMB 24,664 per tonne in April, up 1.1 per cent from March. Meanwhile, the industry's weighted average cost increased by 0.9 per cent on a month to RMB 15,717 per tonne. 

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Inventories continued to build in April, as higher primary aluminium prices still dampened downstream purchasing. However, the pace of accumulation slowed notably. By the end of April, retail inventories of primary aluminium held in warehouses in the 16 major cities under Mysteel's tracking stood at 1.45 million tonnes, up 3.7 per cent from a month earlier and easing from the sharper 18.9 per cent on-month increase recorded in March, Mysteel Global noted.

The slowdown in primary aluminium inventory growth suggests a gradual recovery in demand from aluminium re-rollers and end-users.

Over the January-April period, China's primary aluminium output totalled 15.33 million tonnes, up 3.5 per cent on year, according to the NBS data.

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