SHANGHAI, Nov 8 (SMM) – China produced 6.039 million mt of alumina in October, up 0.3% from a year ago, with average daily output at 195,000 mt, 1.7% lower than September. In January-October, China’s alumina output totaled 58.144 million mt, standing 1.7% higher than the same period last year.
Alumina output in October grew on the month as new capacity at Shanxi Xinfa Chemical and East Hope'sJinzhong Chemical generated more output.
Last month, Xinfa Group reduced output at its Shanxi Jiaokou alumina refinery due to maintenance at its power plant. Environmental probes impacted production at some alumina refineries in Lvliang in Shanxi, and bauxite shortages forced some alumina refineries in Guizhou to cut output. These factors capped gains in overall alumina output in October.
SMM expects average daily output alumina in November to increase to 201,000 mt in November as refineries in Shanxi recovered their output. This is estimated to generate 6.025 million mt of alumina output for the month of November.
The alert for heavy-pollution alert issued by Henan during November 1-5 impacted operation at two alumina refineries in Zhengzhou.
China produced 3.114 million mt of primary aluminium in October, up 3.5% compared to a year earlier. This grew overall output in January-October to 30.166 million mt, standing 0.8% lower than the corresponding period last year.
As of the end of October, there is about 37.48 million mt of primary aluminium capacity in operation across China and about 4.82 million mt of idle capacity. Operating rates dipped 0.3 percentage point from a month ago to 88.6%.
New capacity continues to be commissioned while older, inefficient capacity continues to be cut. Operating capacity expanded since September after a steep contraction in July-August. SMM data showed over 1.5 million mt of primary aluminium capacity has been cut thus far this year.
Newly-commissioned capacity did not significantly grow output of aluminium ingot as the process of starting primary aluminium production would deplete some molten aluminium.
In November, aluminium producers who run in losses are likely to deepen their output cuts as they face higher costs in Gansu, Qinghai and Henan. New capacity will come online in Inner Mongolia, Guangxi and Yunnan.
SMM expects output of primary aluminium to come in at 3.03 million mt in November, 4.3% higher from a year ago, but the year-over-year growth in year-to-date output would remain in contraction territory, of 0.4%.
