China Metallurgical-grade Alumina Output Increase to 6.595 million mt in May

SHANGHAI， June 10 (SMM) - SMM China metallurgical-grade alumina output in May (31 calendar days) was 6.955 million mt. The average daily output of metallurgical-grade alumina was 224,400 mt, an increase of 12.16% MoM and 12.02% YoY. Alumina output totalled 31.046 million mt from January to May, up 5.2% year on year.

The production days in May added by 1 day compared with the previous month, so the output generally increased across China. The output in Chongqing and Hebei provinces increased significantly due to the additional output from new capacity. The output in Shandong, Shanxi, Henan, Guangxi, Guizhou, Yunnan, Inner Mongolia, Chongqing, Hebei increased by 11%, 3%, 5%, 9%, 6%, 3%, 2%, 224%, 119% MoM to 2.268 million mt, 1.719 million mt, 834,000 mt, 1.057 million mt, 418,000 mt, 119,000 mt, 42,000 mt, 323,000 mt and 175,000 mt respectively.

According to SMM, as of the beginning of June, in terms of new capacity, Phase II of Jingxi Tiangui with 850,000 mt has been in full production while phase III has commissioned, and is planned to be put into production in June. Chongqing Bosai Wanzhou project achieves an operating capacity of 2.7 million mt, and will continue to put another 900,000 capacity into production in June. The first production line of Hebei Wenfeng is already in full production with a capacity of 1.2 million mt, and the second production line is in production and is expected to reach full production in early June. Phase II Lubei Chemical with a capacity of 1 million mt, Phase II of Luyu Bochuang with 1 million mt, and Phase II of Guangxi Tiandong Jinxin with 1.2 million mt will all be put into production in the second half of this year. To sum up, a larger volume of new alumina production will flow into the market from Q3.

On the whole, it is estimated that the net import of alumina in May was -150,000 mt, with a surplus of 193,000 mt. The fundamentals of alumina reversed from shortage to surplus, leading to the correction of alumina prices. Subsequent new production capacity will be put into production more quickly and significantly, and the long-term fundamentals of alumina will remain in surplus. If the prices of alumina continue to fall, the pressure on high-cost alumina plants in Shanxi and Henan will increase sharply, which may lead to production reduction. (1 mt of aluminium consumes 1.925 mt of alumina)