Overview of Current Overseas Aluminium Production Cuts and Distribution of Global Aluminium Production Capacity

SHANGHAI, Aug 25 (SMM) -

Distribution of global aluminium production capacity

According to SMM statistics, the current global aluminium production capacity totals about 79.28 million mt. Specifically, China's existing and operating aluminium capacity accounts for about 56%; that of the rest countries in Asia accounts for about 16.5%; the installed capacity in Europe amounts to about 10.348 million mt, accounting for about 13%; that in North America accounts for about 6%, while South America, Africa and Oceania combined account for less than 3%.

Strike and output cuts in Europe

Earlier, some aluminium smelters in Europe had cut the production due to high energy costs, while the recent strikes in Europe prompted the decline further. According to SMM statistics, the total production capacity reduction in Europe and North America combined reached about 1.465 million mt. Among them, the reduction in the Europe was about 1.16 million mt, accounting for 11.2% of the total installed capacity in Europe; the production in North America declined about 304,000 mt, accounting for 6.2% of the installed aluminium capacity in North America.

Summary of output cuts at China and abroad

Domestically, the high temperatures combined with scarce rainfall weighed heavily on the production of aluminium in Sichuan, where almost all smelters have suspended the production, leading to a loss of about 1 million mt. In comparison, the output cuts in Chongqing was fewer at about 30,000 mt. It is learned that the current aluminium production remained unaffected and stable in Henan. SMM estimates that the total reduction in domestic aluminium production is about 1.03 million mt. Overseas, the output of aluminium in Europe and North America have been falling since early 2022 due to the energy issue. So far, the production cuts of aluminium has totalled about 1.465 million mt. On the whole, the production of aluminium has been limited recently, leading to a decline in the supply side. In the short term, traders should be aware of the market's concerns about the falling aluminium supply, which could push up the aluminium prices; but in the long run, the demand will remain weak, and the aluminium prices will face downward pressure once the production resumes in the future.