China’s aluminium output grows 7% Y-o-Y to 3.5 Mt in July’22, thanks to new capacity release

According to the Shanghai Metals Market, China’s aluminium production stood at 3.5 million tonnes in July (31 calendar days), reflecting a year-on-year increase of 6.74 per cent. That brought the total volume of output in the first seven months of the year to 23.059 million tonnes, up by 1.4 per cent over the year.

In July, a rise in total domestic operating capacity of aluminium with the resumption of production and release of new capacities in Gansu and Yunnan pushed the output up. Daily output stood at 112,900 tonnes, increasing by 862 tonnes on the month and 7,113 tonnes on the year. In July, domestic proportion of aluminium liquid grew by 0.2 per cent M-o-M to 66.64 per cent.

In Guangxi, however, the production resumption slowed down, while in Sichuan and Shandong, the output decreased by about 70,000 tonnes due to power shortage and other problems.

As of early August, the domestic operating aluminium capacity reached 41.405 million tonnes, with the valid installed capacity at 44.475 million tonnes. Therefore, the average operating rates stood at 93.1 per cent.

In August, Gansu Liancheng, Jili Baikuang, Guangxi Investment Group Yinhai, and many others have continued to resume production. Besides, the new projects of Gansu Zhongrui and Guangyuan Zhongfu will reach full production. But due to the production fall in Sichuan and Shandong in July and the overhaul of a smelter in Henan, SMM expects the domestic aluminium operating capacity to reach 41.59 million tonnes at the end of August. SMM also anticipates the domestic aluminium output to reach nearly 3.52 million tonnes this month, up by 9 per cent Y-o-Y.

But operating rates are unlikely to increase significantly as the new orders for domestic aluminium flat rolled products and extruded products are weak in August. Supply will still increase, adding to the social inventories. SMM expects the domestic aluminium inventory to stand at 750,000 tonnes by the end of August.