China March aluminum output and April forecast

According to SMM statistics, China's aluminium output was 3.555 million mt in March (31 days), up 4.19% YoY. The domestic daily average aluminium output was flat MoM at 114,900 mt. In March, the production and shipments of aluminum smelters returned to normal on fading impact from CNY holidays. The share of aluminium liquid output rose by 9.6% MoM and 1.4 % YoY to about 73.88%. According to SMM aluminium liquid ratio data, the domestic aluminium ingot volume in March was down by 1.24% YoY to around 928,600 mt.

Changes in production capacity: In March, domestic aluminium smelters maintained steady operations. Yunnan aluminium smelters have begun to resume production, boosting the domestic aluminum operating capacity. As of April 9, operating capacity in Yunnan had reached 4.74 million mt/year, up 5.57% MoM, and the remaining may be restarted after the rainy season arrives. However, a smelter in Inner Mongolia still has 40,000 mt of capacity that has yet to resume after power outage forced it to shut down, and another smelter in Sichuan was shut down for maintenance at the end of March, which will last until September. As of the end of March, the existing aluminium capacity was about 45.19 million mt, the operating aluminium capacity was around 42.1 million mt, and the operating rate grew by 4.39% YoY to 93.15%.

Production forecast: In April 2024, the domestic aluminum operating capacity is expected to continue to rise, mainly due to the first batch of production resumption and sufficient hydropower supply in Yunnan. We still need to pay attention to whether the remaining production capacities in Yunnan will resume.

SMM predicts that the first batch of production resumption may be completed in mid-April, boosting production in April, while other regions may change little. Domestic aluminum operating capacity may rise by 250,000 mt to 42.35 million mt at the end of April. The aluminum production capacity in April (30 days) is expected to be around 3.49 million mt. The share of aluminium liquid output may remain above 70%. We need to pay attention to production resumption and power supply in Yunnan.