Overview of China's primary aluminium production in December 2024 and forecast for January 2025

According to SMM statistics, China's aluminum production in December 2024 (31 days) increased by 4.13 per cent YoY, with cumulative production from January to December up 3.89 per cent Y-o-Y.

In December, multiple aluminum smelters in Sichuan and Guangxi reduced production. Specifically, in Sichuan, high alumina and electricity costs led to severe losses and production cuts, while in Guangxi, some smelters reduced production due to technological transformation, with plans to resume in Q4 2025. Resumption progress in Sichuan and Guizhou stalled during the month, mainly due to high alumina prices and weak demand and prices in the off-season, reducing the motivation for resumption. Projects in Xinjiang, Inner Mongolia, and Ningxia proceeded as planned.

During the month, the proportion of casting ingots increased in many regions, while the proportion of liquid aluminum decreased by 1.22 percentage points M-o-M and 1.99 percentage points Y-o-Y. Based on SMM's liquid aluminum proportion data, domestic aluminum casting ingot production in December increased by 8.23 per cent Y-o-Y to approximately 1.03 million mt.

Capacity Changes

By the end of December, SMM statistics showed that China's existing aluminum capacity was approximately 45.71 million tonnes, with operating capacity around 43.53 million tonnes, and the industry's operating rate increased by 2.49 percentage points Y-o-Y to 95.38 per cent. Currently, domestic aluminum smelters' operating capacity shows both increases and decreases. The increase mainly comes from the ramp-up of new projects at a smelter in Xinjiang, while the decrease is primarily due to production cuts at multiple smelters in Sichuan due to losses and at some smelters in Guangxi due to technological transformation. Additionally, a capacity replacement project at a smelter in Inner Mongolia is proceeding as planned and is expected to be completed within the year, while a capacity replacement project in Ningxia has been completed.

Production Forecast

Entering January 2025, domestic aluminum operating capacity is expected to remain stable, with the negative impact of earlier production cuts on output becoming evident. SMM has learned that no additional smelters plan to cut production. By the end of December, the annualized operating capacity of domestic aluminum remained stable at 43.53 million tonnes per year. As the Chinese New Year holiday approaches, downstream demand weakens, and some billet plants reduce production, the proportion of liquid aluminum is expected to decrease further to around 70 per cent in January. Future attention should focus on changes in aluminum capacity across regions and the operating conditions of downstream sectors such as aluminum billets.

Information source: https://news.metal.com/newscontent/103118837/Overview-of-Chinas-Metals-Production-in-December-2024-and-Forecast-for-January-2025