China to Add Additional 1 Million-tpy Aluminum Capacity in Q2, SMM Sees

SHANGHAI, Apr. 7 (SMM) –Close to 2 million-tpy new aluminum capacity entered production in China from November through Q1, and an additional 1 million-tpy is about to come online in Q2, Shanghai Metals Market foresees.

 

Falling power costs is the main incentive behind the aggressive expansions. The weighted average cash cost for operational aluminum capacity in China dropped 800-1000 yuan ($130-163) per tonne year-on-year in Q1, SMM data showed. This is due to the growing use of captive power and falling coal prices. 

 

New capacity concentrates in Xinjiang, Inner Mongolia and Shandong, where power costs are comparatively lower. 

 

Some 500,000 tonnes of capacity was idled in Q1, 150,000 tonnes were closed for maintenance, but 400,000 tonnes of idled capacity returned to production, SMM statistics showed.