SMM data shows that in February (29 days), China's metallurgical grade alumina production was 6.262 million tons, and the average daily production decreased by 900 tons/day from the previous month to 215,900 tons/day. Total output in February decreased by 6.8% month-on-month but increased by 2.4% year-on-year. As of the end of February, China's existing alumina production capacity was 100 million tons, its operating capacity was 78.82 million tons, and the national operating rate was 78.8%.
In Shanxi, the operating rate in February was 68.0%, an increase of 1.3% from January. This was mainly because an alumina refinery in Shanxi was forced to reduce production due to tight ore supply and limited production operations. The refinery returned to full capacity in late February, so the operating rate increased slightly month-on-month.
In Henan, the operating rate was 55.0%, down 1.7% from the previous month. In Shanxi and Henan regions, the government successively issued documents related to the follow-up mining layout in February. The market is optimistic about resumption of production, but there is no news of the production resumption, and ore supply problems continue to restrict the operating rate.
In Guizhou, some alumina refineries suspended production in early February around the Spring Festival, affecting an annual production capacity of 600,000 tons, and the production resumption plan was postponed to mid-March. Therefore, the operating rate of Guizhou Province dropped sharply by 10.8% month-on-month to 75.2% in February.
In Hebei, alumina production was generally stable in February and reached full production in late February. The operating rate increased slightly by 5.5% from last month to 93.8%.
In Guangxi, the operating rate in February dropped slightly by 1.8% from January to 82.3%. In February, alumina refineries in Guangxi reduced production due to insufficient ore supply, affecting an annual production capacity of 500,000 tons.
In Shandong, the operating rate in February increased by 0.6% from January to 95.8%. Stimulated by the current profit margins of domestic alumina, the overall operating rate in Shandong was stable, and companies had a strong willingness to increase production.
Next month forecast
According to SMM research, mines at Shanxi and Henan have not announced a precise resumption plan. The overall production resumption is slow. In the southwest, an alumina refinery in Guizhou suspended production before CNY holiday. It was originally planned to resume production in early March. The company's production resumption has been postponed to mid-March, affecting a production capacity of approximately 600,000 tons/year.
In addition, an alumina refinery in Guangxi that had previously suspended production due to insufficient ore supply initially planned to resume part of its production capacity in late March, affecting an annual production capacity of 500,000 tons. Therefore, SMM estimates that the average daily output in March 2024 will be 217,500 tons/day. The total operating production capacity is about 79.37 million tons, a year-on-year increase of 1.48%.
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