Aluminium Operating Capacity to be Restored to 41 Million mt by the End of May

SHANGHAI, May 11 (SMM) - Production forecast: 380,000 mt aluminium capacity is about to resume in Guizhou (320,000 mt) and Sichuan (60,000 mt) in May. About 180,000–200,000 mt capacity in Yunnan will be resumed. The new capacity in Sichuan and Inner Mongolia has totalled 340,000 mt, but the commissioning of new projects is slow. Therefore, the new capacity put into operation is expected to be less than 30,000 mt in May. The capacity transfer in Shandong may lead to a slight decline in capacity and an aluminium enterprise in Guizhou with 50,000 mt capacity has suspended production. SMM predicts that the domestic aluminium operating capacity will be restored to about 41 million mt by the end of May and the output will stand at 3.46 million mt in May (31 days), a year-on-year increase of 0.72%.

On the demand side, despite the declining operating rates of downstream enterprises, the aluminium ingot stocks declined 235,000 mt amid the increasing aluminium liquid ratio and low aluminium ingot output. In contrast, the overall inventory of aluminium billet only shed by 16,000 mt in April and stood at a relatively high level.

In May, the high aluminium liquid ratio and improving downstream orders are expected to lower the domestic aluminium ingot inventory to around 720,000 mt. But the aluminium billet stocks may continue to fall at a slow pace amid the rising output.