In January, during the Chinese New Year holiday, the casting ingot output of aluminium plants across various regions increased

According to SMM statistics, China's aluminium production in January 2025 (31 days) was up 3.8 per cent Y-o-Y but down 0.3 per cent M-o-M. The operating capacity of domestic aluminium smelters in January remained largely stable M-o-M, with only a few smelters in Shanxi reporting production cuts of 20,000 tonnes per year. Other previously reduced capacities have not resumed production. During the month, the proportion of casting ingots increased in multiple regions, while the proportion of liquid aluminium decreased by 2.9 percentage points M-o-M and 1.0 percentage points Y-o-Y. Based on SMM's data on the proportion of liquid aluminium, the casting ingot production in December increased by 7.3 per cent Y-o-Y to approximately 1.13 million tonnes.

Capacity changes

As of the end of January, SMM statistics show that the existing capacity of domestic aluminium smelters was approximately 45.71 million tonnes, while the operating capacity was around 43.51 million tonnes. The industry's operating rate decreased by 0.04 percentage points M-o-M but increased by 2.29 percentage points YoY to 95.2 per cent. Currently, the operating capacity of domestic aluminium smelters remains largely stable, with only a few smelters in Shanxi cutting production by 20,000 tonnes per year due to technological transformation. The production capacities reduced in Sichuan and Chongqing in December due to losses have not yet resumed production. SMM will continue to monitor subsequent developments.

Production forecast

Moving into February 2025, the operating capacity of domestic aluminium smelters is expected to remain stable, with no production resumption plans for previously reduced capacities. By the end of February, the annualised operating capacity of domestic aluminium smelters is expected to remain at 43.51 million tonnes per year. February coincides with the Chinese New Year holiday, leading to weaker downstream demand and production cuts at some billet and alloy plants. The proportion of liquid aluminium is expected to further decrease to around 68 per cent in February. Continued attention is needed on capacity changes in various regions and the operating conditions of downstream sectors such as aluminium billets.

Source: SMM