China’s daily average aluminium production grows 1700tonnes/day in March’22 on new capacities commencement

According to the Shanghai Metals Market, China’s aluminium production in March 2022 (31 days) stood at 3.315 million tonnes, 0.92 per cent less year-on-year. The daily average output was 106,900 tonnes, which also reflected a drop of 1000 tonnes on the year but 1,700 tonnes more than in the previous month.

From January to March, China produced 9.465 million tonnes of aluminium in total, a decrease of 2.28 per cent year-on-year.

In March 2022, many new capacities were put into operation, along with the resumption of suspended projects. In Yunnan and Guangxi, a total of 998,000 tonnes of new and resumed production capacity came into operation. Besides, domestic aluminium smelters faced no production cut in March.

On the other hand, the conversion of aluminium liquid in some smelters was low in March as the pandemic broke out in many places in China. According to SMM research, the proportion of aluminium liquid was about 63 per cent in March, an increase of 1.8 per cent month-on-month.

As of early April, Chinese aluminium operating capacity reached 39.974 million tonnes, while the installed capacity was 44.047 million tonnes. The operating rates stood at 90.8 per cent.

There is also a possibility of growth on the domestic supply side in April as both suspended and new production capacities in Yunnan, Guangxi and other places have started operations. The domestic aluminium operating capacity is expected to reach around 40.3 million tonnes by the end of April, with the output to reach 3.32 million tonnes, up by 1.9 per cent on the year.

Since the domestic consumption remained weak, causing a mismatch between supply and demand in the aluminium market, social inventory built-up through the month. The phenomenon is expected to continue in the first ten days of April. But later on, the inventory will decline as the consumption will resume with the end of pandemic. SMM projects the domestic aluminium social inventory to reach the level of 1.1 million tonnes at the end of April.