SHANGHAI, Aug 9 (SMM) - Domestic metallurgical-grade alumina output in July (31 calendar days) was 6.94 million mt with average daily output of 223,900 mt, up 2.97% on the month and 14.11% on the year. The operating capacity of alumina was 81.713 million mt and the domestic operating rates stood at 87%.
In terms of regions, the total alumina output in Shandong was 2.12 million mt, flat from June. In Shanxi, the total output stood at 1.798 million mt, a slight increase of 2% compared with that in June. Due to the tight supply of raw materials and high purchase prices, the profits of alumina plants were squeezed, hence the operating rates rarely increased. In Henan, the total output was 738,000 mt, up 6% from June. Most of the enterprises in Henan and Shanxi produced for the long-term orders, and were less willing to produce for spot transactions. In total output in Guangxi was 1.07 million mt, up 6% on the month. Due to the production resumption of aluminium in Yunnan, the demand for alumina increased. Therefore, the operating rates of alumina in Guangxi remained at around 95%-100%. Although the enterprises were willing to produce, they mainly focused on the long-term orders. Therefore, there were few products in the market. In Guizhou, the total output stood at 467,000 mt, an increase of 3% from June. Although the local ore supply increased slightly, the enterprises struggled to maintain production. The raw material supply determines the stability of local production. With the release of new capacity in Chongqing and Hebei, the output across two provinces increased. Among them, the total output of Chongqing was 373,000 mt, up 3% on the month, and the total output in Hebei stood at 195,000 mt, an increase of 11% from June. The output of other provinces was basically stable, with total output of 136,000 mt in Yunnan and 42,000 mt in Inner Mongolia.
On the whole, it is estimated that the net imports of alumina in July will be -100,000 mt. There will be a slight surplus of 103,000 mt in the month, and the surplus of about 578,000 mt during January-July. At present, the alumina market experiences both production reduction and the release of new capacity. At the same time, it is rumoured that an alumina plant in Shanxi may suspend the production (involving capacity of 3 million mt) in August. In this scenario, the supply is expected to gradually change from huge surplus to tight pattern. The market will gradually restore the balance between supply and demand through games and SMM will continue to pay attention to the production reduction and the release of new capacity.
