Aluminium Output in March Likely to be Affected by Previous Production Cuts

SHANGHAI, Mar 9 (SMM) - The previous production reduction in Yunnan will gradually be reflected in the aluminium output in March. Although the operating capacity in Guizhou and Sichuan is expected to resume, but it will make little contribution to production. The average daily output will decline. According to the capacity changes, the domestic operating capacity of aluminium may recover to around 40.19 million mt at the end of March and output in March (31 days) is expected to increase 2.2% YoY to 3.39 million mt. On the demand side, in February, domestic downstream demand recovered, hence the new orders and monthly output of aluminium producers improved on the month. Although export orders failed to exceed the level of the same period last year, the overseas demand was better than the fourth quarter in 2022. However, the domestic aluminium social inventory still increased seasonally. In light of the increasing domestic output from January to February, the social inventory of aluminium ingots increased significantly by 280,000 mt in February. With the continuous recovery of downstream demand, the social inventory of aluminium may usher in an inflection point. It is expected that the domestic social inventory may drop to around 1.15 million mt by the end of March.