China Alumina output in October and forecast for November

SMM reports China's October metallurgical-grade alumina production at 6.842 million mt, averaging 220,700 mt/day, down 3700 mt/day MoM. This decrease owes to tight ore supply in Guangxi, October roasting maintenance, and emission reduction policies in Shandong. Furthermore, an alumina refinery in Henan reduced production due to ore scarcity. Thus, October's daily production fell from September, with total production down 1.6% MoM. October's alumina production rose 2.5% YoY. By October’s end, China's alumina installed capacity was 100 million mt, operating capacity 80.68 million mt, and operating rates 80.7%. Cumulative alumina production from January to October reached 66.264 million mt, up 2.0% YoY.

In October, Shanxi's operating rate was 75.0%, up 2.2% MoM, due to a 550,000-mt-capacity alumina refinery resuming normal production post-maintenance. In contrast, Henan's operating rate dropped 7% to 65.7%, largely because of an alumina refinery in Sanmenxia reducing production due to ore scarcity, affecting around 700,000 mt of annual capacity. SMM research indicates no imminent resumption of production at Sanmenxia mines. In Guizhou, ore supply and cost issues kept some alumina refineries at low production levels, keeping the October operating rate stable at 81.6%.

In October, Hebei's operating rate rose slightly to 88.3%, up 0.8% MoM, with northern environmental policies having minimal impact on local production. In contrast, Guangxi's operating rate fell from 89.0% to 86.9%, due to an early October shutdown of an alumina refinery over tight ore supply, affecting around 500,000 mt of annual capacity, though it resumed normal production later. October roasting maintenance also reduced production by 15,000 mt. Shandong's operating rate dropped from 90.9% to 88.8%, as a large alumina refinery had to limit roasting production due to local environmental policies, affecting monthly production by about 100,000 mt. It has since resumed normal production.

November forecasts suggest some previously halted capacity in Guangxi will resume, albeit slowly. Yunnan's alumina production is expected to drop further, and with scheduled maintenance, overall operating rates may fluctuate slightly. Mines in Henan's Sanmenxia area anticipate no immediate resumption, with ongoing ore shortage continuing to constrain production, keeping operating rates low. Shanxi alumina refineries plan no production changes, with ore and cost limitations hindering further production increase. Companies in Shandong and Hebei, which halted production in October due to environmental restrictions, have resumed normal operations. Yet, potential production restrictions loom due to frequent heavy pollution in northern regions towards year-end. Therefore, SMM forecasts November daily alumina production around 223,000 mt/day, and total operating capacity about 81.5 million mt, up 6.4% YoY.