Metals News
UPDATE 1-China's Aluminium Output Rises in Feb - IAI
industry news
Mar 22,2011

LONDON, March 21 (Reuters) - China's daily aluminium production rose more than 12 percent in February compared with the same month last year, figures from the International Aluminium Institute showed, as producers ramped up production.

China's daily average aluminium output last month was 46,600 tonnes, up from a revised 41,400 in February last year, which works out to an annualised 17 million tonnes.

National production is now almost back to previous peak run-rates recorded in the middle of last year before the gearing-down to meet Beijing's energy efficiency targets ahead of the December expiry of a five-year plan, according to Reuters columnist Andy Home.

Last December China's Henan province reduced power supply to aluminium smelters by 20 percent, hurting operations in the country's top producing province.

But the flow of electricity to smelters increased last month, enabling them to ramp up idled and new capacity of the highly energy-intensive metal.

"Because China is getting bigger all the time it's inevitable production will keep rising," Daniel Smith, an analyst at Standard Chartered, said. Separate statistics show China's net imports of primary aluminium last month virtually halved from January, although Chinese production rose.

Brisk demand growth and soaring energy costs are likely to keep aluminium prices bouyant, although high stocks and prospective oversupply will restrain gains.

Three-month aluminium on the London Metal Exchange CMAL3 was $2,565 a tonne at 1634 GMT, from $2,560 at the close on Friday. Demand growth and soaring energy But a lack of restraint by Chinese producers and near record-high inventories of the metal could keep cap price gains.

Aluminium's contango MAL0-3 -- or discount for cash material over the three-month contract -- widened to $29 a tonne. Worries about market tightness in January narrowed the contango to $7.

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