Growing costs, losses shrink operating primary aluminium capacity in Aug

SHANGHAI, Sep 5 (SMM) – China produced 3.11 million mt of primary aluminium in August, up 1.5% year on year. This brought the overall output in January-August down 1.8% from the corresponding period last year, stand at 24.05 million mt, SMM data showed.

There is about 37.36 million mt of primary aluminium capacity in operation across the country as of the end of August and about 4.54 million mt of idle capacity. Operating rates in August came in at 89.2%, down 0.3 percentage point from July as costs and losses grew.

Some capacities with high costs in Gansu, Shaanxi and Henan provinces were shut permanently and this shrank operating volumes.

Commissioning of new capacities is likely to remain slow in the short term. Most of the new capacities are located in Inner Mongolia and Guangxi. Newly-commissioned capacities are unlikely to exceed 200,000 mt across the country in September, SMM expects.

SMM estimates September’s output to come in at 3.03 million mt, up 3.8% from the same period last year. While the small output in September 2017 would support annual growth into positive territory, the annual change for the January-September period is likely to be in a contraction, of 1.2%.