SMM analysis on China June alumina output and July forecast

According to SMM, China's metallurgical-grade alumina output in June (30 days) was 6.842 million mt, with an average daily output of 228,100 mt/day, a slight increase of 2,600 mt compared to May. Due to fewer production days in June, June output decreased by 2.10% MoM but increased by 5.91% YoY. By the end of June, China's installed capacity for metallurgical-grade alumina was 100.6 million mt, with an operating capacity of 83.24 million mt and an operating rate of 82.7%. H1 output reached 40.293 million mt, up 3.84% YoY.

By region:

Shanxi: The operating rate in June was 76.6%, a slight increase of 0.8% compared to May. In June, alumina producers in Shanxi saw mixed changes in their production. A medium-sized alumina refinery increased production in mid-June, involving an annual capacity of 300,000 mt. Meanwhile, some alumina refineries in Shanxi reduced production due to bauxite supply issues, involving an operating capacity of 200,000 mt.

Henan: The operating rate in June was 68.3%, an increase of 2.2% MoM, primarily as a local alumina refinery increased production in early June as bauxite supply shortage eased, involving an annual capacity of around 300,000 mt.

Guizhou: The operating rate in June increased by 1.0% MoM to 81.8%, mainly as an alumina refinery conducted equipment maintenance in May, impacting an operating capacity of 400,000 mt, and later resumed production to around 900,000 mt in June. Meanwhile, another alumina refinery in Guizhou reduced production due to raw material supply issues, involving an annual capacity of around 150,000 mt.

Hebei: The operating rate in June decreased by 6.1% MoM to 89.6%, mainly because a local alumina refinery conducted roasting furnace maintenance in June, involving an annual capacity of 800,000 mt.

Guangxi: The operating rate in June rose slightly by 0.5% MoM to 88.9%. In June, alumina producers in Guangxi both increased and decreased production. An alumina refinery increased production by supplementing raw materials with imported bauxite, involving an annual capacity of 200,000 mt. Meanwhile, another local alumina refinery reduced production by about a quarter due to roasting furnace maintenance, with initial plans to complete maintenance by mid-to-late July.

Shandong: Alumina producers showed mixed production changes, with the overall operating rate in Shandong remaining at 94.4% in June.

July forecast: The SMM survey indicates that approximately 300,000 mt of resumed capacity in Shanxi will gradually be released in July. An alumina refinery in Guangxi plans to complete maintenance by mid-July, resuming 300,000 mt of capacity. Additionally, new capacity in Inner Mongolia is expected to gradually be released in mid-July. Therefore, it is expected that the average daily output of alumina in China will continue to increase in July. However, due to the limited resumption of bauxite production in Shanxi and Henan, local bauxite supply remains tight, which may limit significant increases in alumina output in these regions. SMM expects that the average daily output of metallurgical-grade alumina in China will reach 230,800 mt in July, with a total operating capacity of around 84.24 million mt, up 3.9% YoY.