China's aluminium production soars in July with optimistic outlook for August

China's domestic aluminium production for July 2023 surged to a staggering 3.568 million tonnes, registering an impressive 1.95 per cent year-on-year growth. This monumental achievement was underscored by the sector's average daily output, which escalated by over 3,000 tonnes month-on-month to a robust 115,100 tonnes. Notably, the year-to-date figures tell a compelling story of steady expansion, with total domestic aluminium production reaching 23.676 million tonnes, marking a 2.7 per cent year-on-year cumulative increase.

July witnessed a minor ebb and flow in the molten aluminium ratio, a metric underlining industry health. Bolstered by increased downstream capacity, certain entities observed a shift from ingots to molten aluminium, propelling the ratio upwards by 0.6 percentage points to reach 72.6 per cent.

Delving into capacity dynamics, the landscape displayed a dual nature. July's production uptick was spurred by a notable upswing in operational capacity, led by the remarkable resurgence in Yunnan. The province's resumed production, amassing 1.22 million tonnes, fused with figures from June to culminate in an impressive 1.48 million tonnes.

However, certain setbacks were observed, with production halts in Shandong and maintenance work in Sichuan contributing to an overall decrease of 230,000 tonnes. China's aluminium capacity matrix painted a robust picture, boasting an installed capacity of approximately 45.19 million tonnes and an operational peak of 42.16 million tonnes, a historic high.

Turning to the crystal ball, August promises a vibrant continuation. Yunnan's aluminium giants are primed for further resurgence, with nearly 620,000 tonnes of capacity poised to resume production. The province is set to usher in 490,000 tonnes by the month's end, alongside an influx of relocated production. Coupled with capacity shifts in other regions, China's operational aluminium capacity is projected to hover around 42.7 million tonnes by August's close.

Anticipation mounts as the nation braces for a productive August. Forecasts paint a vivid picture of the sector's continued ascent, with the expected domestic aluminium production touching 3.60 million tonnes, showcasing a remarkable 3.5 per cent year-on-year increase. Keeping a vigilant eye on southwestern power dynamics and industry operations shall remain paramount as the narrative of China's aluminium prowess unfolds.

If you want to gain a comprehensive market insight into the aluminium value chain, explore AL Circle's Global Aluminium Industry Outlook 2023 report.

Received under the content exchange agreement with SMM (metal.com)