Domestic Aluminium Output Increased in July as the Total Operating Capacity Continued to Increase

SHANGHAI, Aug 9 (SMM) - According to SMM data, China produced 3.5 million mt of aluminium in July (31 calendar days), up 6.74% on the year. The daily output stood at 112,900 mt, up 862 on the month and 7,113 mt on the year. The output totalled 23.059 million mt from January to July 2022, an increase of 1.4% on the year. In July, the total domestic operating capacity of aluminium continued to increase. The resumption of production and the release of new capacity in Gansu and Yunnan was stable. In Guangxi, the production resumption slowed down. Due to the power shortage and other problems, the output of Sichuan and Shandong declined by about 70,000 mt in total. As of early August, the domestic operating aluminium capacity reached 41.405 million mt, with the valid installed capacity at 44.475 million mt, hence the average operating rate stood at 93.1%. The proportion of aluminium liquid of domestic aluminium smelters was mainly stable. Some smelters adjusted the proportion according to the situation. According to SMM, the domestic proportion of aluminium liquid increased by 0.2% on the month to 66.64% in July.   

In August, Gansu Liancheng, Jili Baikuang, Guangxi Investment Group Yinhai, etc. continue to resume the production. In addition, the new projects of Gansu Zhongrui and Guangyuan Zhongfu will reach full production and the capacity replacement project in Yunnan proceeds steadily. Due to the production reduction in Sichuan and Shandong in July and the overhaul of a smelter in Henan, SMM expects that the domestic aluminium operating capacity will reach 41.59 million mt by the end of August, and the domestic aluminium output in August is expected to reach around 3.52 million mt, a year-on-year increase of 9%. On the demand side, according to SMM research, the new orders of domestic aluminium sheet/plate and strip and aluminium extrusion, especially construction extrusions declined in August. Therefore, the operating rates are unlikely to pick up significantly, but the supply will still increase. As the inventory of domestic aluminium ingots and aluminium rod may continue to increase in August, SMM expects that domestic aluminium inventory may stand at 750,000 mt by the end of August.