The alumina refinery operating rate hit a six-month low, with daily output decreasing by 0.42% MoM in February [SMM data]

SMM data shows that China's metallurgical-grade alumina production was 6.262 million tons in February (29 days), and the average daily production decreased by 0.09 million tons/day from the previous month to 215,900 tons/day. Total production in February decreased by 6.8% from January and increased by 2.4% year-on-year. As of the end of February, China's alumina production capacity was 100 million tons, its operating capacity was 78.82 million tons, and the national operating rate was 78.8%.

In Shanxi, the operating rate in February was 68.0%, up 1.3% from January. This was mainly because an alumina plant in Shanxi was forced to reduce production due to tight ore supply. The factory returned to full production in late February, so the operating rate increased slightly from the previous month. In Henan, the province's operating rate was 55.0% in February, down 1.7% from the previous month. In north China, the Shanxi and Henan governments successively issued documents related to the subsequent mining layout in February. Expectations for production resumption have increased, but there is no news of the production resumption in the mines that were originally suspended, and ore supply problems continue to restrict the operating rate of enterprises in Shanxi and Henan. In Guizhou, some alumina refineries suspended production in early February around the Spring Festival, affecting an annual production capacity of 600,000 tons, and the production resumption plan was postponed to mid-March. Therefore, the operating rate of Guizhou Province dropped significantly by 10.8% month-on-month in February to 75.2%; the alumina production in Hebei was generally stable in February, and reached full production in late February. The operating rate increased slightly by 5.5% from last month, returning to 93.8%; in Guangxi, the operating rate in February was fell by 1.8% from January to 82.3%. In February, some alumina refineries in Guangxi reduced production due to insufficient ore supply, affecting an annual production capacity of 500,000 tons. In Shandong, the province's operating rate increased by 0.6% to 95.8% in February from January. Affected by the current domestic profit margins of alumina, the overall operating rate in Shandong has been stable, and companies have a strong willingness to increase production.

Forecast for next month: According to SMM research, mines at Shanxi and Henan have not yet announced the resumption plan. The overall production resumption of local alumina refineries is slow. In the southwest, an alumina refinery in Guizhou suspended production before the holiday. It was originally scheduled to resume production in early March. The company's plan to resume production was extended to mid-March, affecting a production capacity of approximately 600,000 tons/year. In addition, an alumina refinery in Guangxi that had previously suspended production due to insufficient ore supply initially planned to resume part of its production capacity in late March, affecting an annual production capacity of 500,000 tons. Therefore, SMM estimates that the average daily output in March 2024 will be 217,500 tons/day, the total operating production capacity is about 79.37 million tons, a year-on-year increase of 1.48%.