China’s aluminium output records a 3.5% M-o-M growth in May 2024; June looks positive with more capacity resumptions

In May 2024 (31 calendar days), China's domestic aluminium production was 3.637 million tonnes, an increase of 3.47 per cent M-o-M from 3.515 million tonnes and a hike of 4.61 per cent year-on-year.

The rise in output during May 2024 was primarily driven by the resumption of aluminium plants in Yunnan and Inner Mongolia. However, the proportion of aluminium liquid saw a slight drop due to the reduction in aluminium billet production, down by 0.7 percentage points M-o-M and 2.3 percentage points Y-o-Y to around 73.27 per cent.

According to SMM's aluminium liquid proportion data, the volume of aluminium ingot production in May rose 14.24 per cent year over year to approximately 971,000 tonnes.

Production capacity

According to SMM statistics, China's domestic aluminium capacity at the end of May was 45.19 million tonnes, while the operating capacity was 42.961 million tonnes, and the operating rate was 95.06 per cent, an increase of 5.01 percentage points Y-o-Y.

The increase in operating capacity was mainly due to the resumptions of operations in Yunnan. The improvement in power supply in Yunnan stimulated the second round of production resumption in local smelters, bringing the annual capacity in Yunnan to around 5.45 million tonnes, up about 300,000 tonnes M-o-M. The remaining capacity is expected to be fully resumed by end of June 2024.

A smelter in Inner Mongolia also resumed operations, contributing to the domestic aluminium operating capacity in May.

Production forecast

Looking ahead, SMM anticipates a further improvement in China's aluminium operating capacity in June. This is expected to be driven by Yunnan's continued recovery of power supply and the commissioning of the new project of Huayun Phase III in Inner Mongolia. The installed capacity is projected to grow to 45.36 million tonnes.

Considering the resumption of other capacities, SMM expects China's annual aluminium operating capacity to reach 43.27 million tonnes by the end of June. SMM also expects the aluminium production in June (30 days) to be around 3.54 million tonnes.