China April alumina output and May forecast

SMM data showed that China’s metallurgical-grade alumina output stood at 6.679 million mt in April (30 days), and the daily average output was 222,600 mt/day, up 3,900 mt/day MoM. The total output in April was down by 1.51% MoM but up by 2.2% YoY. As of the end of April, the existing alumina capacity in China was 100 million mt, the operating capacity was 81.27 million mt, and the average operating rate stood at 81.3%.

Operating rate in Shanxi (+2.7% MoM to 72.9%): The growth was mainly contributed by a refinery who restarted in mid-March and resumed two production lines in April after suspension of one production line at the end of 2023 due to insufficient ore supply, boosting the operating capacity by 2.4 million mt. Operating rate in Henan (-3.3% MoM to 63.1%), mainly dragged down by some refineries who cut output by around 550,000 mt due to insufficient ore supply. Operating rate in Guizhou (+6.9% MoM to 83.4%): Several refineries restarted in mid-March after production suspension due to insufficient ore supply, affecting annual capacity of 600,000 mt. As of the end of April, the operating capacity rose to around 500,000 mt. In addition, a refinery reduced output in April due to insufficient ore supply, affecting annual capacity of about 150,000 mt. Operating rate in Hebei (remained at 88.7%); Operating rate in Guangxi (+1.4% MoM to 85.8%): The growth was mainly contributed by a refinery who recovered 24,000 mt of production capacity at the beginning of April after natural gas pipeline failures. In addition, insufficient ore supply in early April forced some refineries in Guangxi to shut down, around 500,000 mt of capacity had been resumed in late April. Operating rate in Shandong (remained at 92.5%).

May forecast: Recently, there are rumours that some mines in Shanxi would re-open. However, SMM learned that no local mines have resumed yet as of May 9. And, even if they do resume in the future the progress of production resumption may be relatively slow. A refinery in Sanmenxia resumed a production line in early May, boosting an annual production capacity of about 500,000 mt. In addition, alumina supply in Shanxi and Henan is unlikely to see significant increase; an alumina refinery in Shandong will end roasting and maintenance in May, which may lift output; there is still about 100,000 mt of production capacity to be resumed in Guizhou. The company said that production resumption depends on ore supply. Taken all together, SMM sees China’s daily average alumina output at 224,300 mt/day in May and total operating capacity at 81.87 million mt, up 3.5% YoY.