3.4 Million Mt/Year of New Alumina Capacity In China To Come Online In May

SHANGHAI, May 15 (SMM) -One 1 million mt/year alumina refinery in Inner Mongolia began to halt production in early April due to various reasons and was fully closed in early May, with no word as to when its production will resume. Three new alumina projects (1.2 million mt/year in Guangxi; 1.2 million mt/year in Hebei; 1 million mt/year in Shandong) will be put into operation in May, causing supply shock in the second quarter. On the demand side, 780,000 mt/year of aluminium capacity in Yunnan was curtailed in February, which has not yet resumed. In terms of cost, SMM data showed the weighted average full cost of alumina refineries in China was 2,698 yuan/mt at the beginning of May, down 24 yuan/mt MoM. The cost decline was mainly driven by falling caustic soda and energy prices. Except for a few alumina refineries who are suffering losses, 90% of the domestic alumina refineries currently have profits ranging from 10-305 yuan/mt. However, as alumina prices kept falling, their profit margins were shrinking.