SMM China February Alumina Output and March Forecast

SMM data showed that China’s metallurgical-grade alumina output stood at 6.262 million mt in February (29 days), and the daily average output was 215,900 mt/day, down 900 mt/day MoM. The total output in February was down by 6.8% MoM but up by 2.4% YoY. As of the end of February, the existing alumina capacity in China was 100 million mt, the operating capacity was 78.82 million mt, and the average operating rate stood at 78.8%.

Operating rate in Shanxi (+1.3% MoM to 68%): The growth was mainly contributed by a refinery, who returned to full production in late February after being plagued by insufficient ore. Operating rate in Henan (-1.7% MoM to 55%): The governments of Shanxi and Henan issued documents pertaining to mining layout in February, sparking a glimmer of hope that local mines might be able to re-open. Yet, there have been no news about local mines resuming production as of now, and ore supply crunch has continued to impede production of local alumina refineries. Operating rate in Guizhou (-10.8% MoM to 75.2%): Several refineries shut down in early February for CNY holidays, involving annual capacity of 600,000 mt, and will delay restarts to mid-March. Operating rate in Hebei (+5.5% MoM to 93.8%): Most refineries maintained stable production and some reached full production in late February. Operating rate in Guangxi (-1.8% MoM to 82.3%): Several refineries cut output in February due to ore shortages, affecting 500,000 mt of capacity. Operating rate in Shandong (+0.6% MoM to 95.8%): Refineries maintained high operating rates amid high profits.

March forecast: Bauxite mines in Shanxi and Henan have no plans for immediate production resumptions, and production resumptions at local alumina refineries are proceeding slowly. A refinery in Guizhou, which halted production due to mine shutdown, will delay production restarts to mid-March, involving 600,000 year/mt of capacity. Another refinery in Guangxi, who shut down 500,000 mt of capacity earlier due to ore shortages, is now planning for restarts in late March. Taken all together, SMM sees China’s daily average alumina output at 217,500 mt in March and total operating capacity at 79.37 million mt, up 1.48%.