According to the Shanghai Metals Market data, China’s aluminium production in December 2022 (31 calendar days) was recorded at 3.44 million tonnes – 2.99 per cent more than 3.34 million tonnes in the previous month and 8.18 per cent higher than 3.14 million tonnes a year earlier. The cumulative production during January-December 2022 amounted to 40.08 million tonnes, up by 4.13 per cent from 38.49 million tonnes during the corresponding period of the previous year.
Despite the increase in monthly production, the average daily output in December 2022 dropped 300 tonnes M-o-M from 111,200 tonnes to 110,900 tonnes. On a year-on-year basis, daily production hiked by 8.3 per cent from 102,400 tonnes.
The domestic operating capacity of aluminium in December declined slightly month-on-month as the smelters in Guizhou had to cut production by about 450,000 tonnes in the said month due to the power shortage. But considering the equipment shutdown process and collection of aluminium liquid, the impact of production cuts in Guizhou was limited.
Aluminium output at smelters in Shandong decreased by about 60,000 tonnes as they planned to transfer part of its production capacity.
Amidst this, smelters in Sichuan resumed production in December by about 340,000 tonnes, while the commissioning progress of the new project of Inner Mongolia Baiyinhua and Gansu Zhongrui took place but slower, hence the output increased slightly.
SMM finds domestic installed aluminium capacity reaching 45.26 million tonnes (including the production capacity that has been installed but has not been put into production) by the beginning of January 2023. The domestic operating capacity was 40.43 million tonnes, and the national operating rate averaged by about 89.3 per cent.
In December 2022, the proportion of aluminium liquid fell 2.74 percentage points M-o-M to 66.38 per cent as the operating rates of downstream users like aluminium billet and aluminium alloy enterprises diminished.
In January 2023, there is no expectation to large-scale production ramp-up owing to the ongoing power shortage in southwest China. Smelters in Guizhou are expected to reduce production further this month with an estimate cut of 400,000-500,000 tonnes.
At the end of the month, the domestic operating capacity is estimated to drop to around 40 million tonnes and the output to decline M-o-M to 3.32 million tonnes.
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