China's aluminium production rose by 3% y-o-y in March despite production cuts in Yunnan

The aluminium production in China for the rest of the months of 2023 might need to be clarified. Although, when compared to the same month last year, China's primary aluminium output escalated by 3 per cent in March. The growth was more sedated than in earlier months. However, this did provide some relief, as the future of output and the price of aluminium globally appears less promising.

The Yunnan province of China, which produces around 12 per cent of China's total aluminium capacity, has seen a string of power outages that have hampered production. In fact, due to insufficient rainfall since September 2022 of the previous year, Yunnan has had problems with its electricity output.

The aluminium smelters in the region are still constrained by these power problems, which decelerate production as well as expansion. This concludes that in other important regions, production is primarily unaffected.

Notwithstanding this moderate production increase, China's post-pandemic economic recovery and seasonal demand growth continue shrinking aluminium inventories. Therefore, appropriate sourcing methods for aluminium are required for Chinese aluminium customers.

On April 14, the amount of aluminium in storage facilities under the Shanghai Futures Exchange's (SHFE) surveillance fell to 274,347 tonnes. In comparison to March 17, 2021, this is a 12 per cent decrease. The building, transportation, and packaging industries all employ metal extensively. Thus, potential changes in the cost and availability of aluminium could have a significant impact.

In the first three months of this year, China's primary aluminium production hit 10.1 million tonnes. This is a 5.9 per cent rise over the same time previous year.