China March alumina output and April forecast

SMM data showed that China’s metallurgical-grade alumina output stood at 6.782 million mt in March (31 days), and the daily average output was 218,800 mt/day, down 2,200 mt/day MoM. The total output in March was up by 7.98% MoM and 2.11% YoY. As of the end of March, the existing alumina capacity in China was 100 million mt, the operating capacity was 79.96 million mt, and the average operating rate stood at 80%. Operating rate in Shanxi (+2.2% MoM to 70.2%), mainly contributed by a refinery who recovered 1.1 million mt of production capacity in mid-March after production suspension due to insufficient ore supply. In addition, operating capacity of a refinery was down by about 400,000 mt in late March due to adjustment. The recovery of capacity may depend on ore supply and production line adjustment. Operating rate in Henan (+9.4% MoM to 66.4%), mainly contributed by a refinery who recovered 900,000 mt of operating production capacity after production reduction due to insufficient ore supply. Operating rate in Guizhou (+1.3% MoM to 76.5%): Several refineries shut down in early February, involving annual capacity of 600,000 mt, which resumed production in mid-March. As of the end of March, the operating capacity rose to around 200,000 mt. In addition, a refinery began the normal maintenance for 12 days since March 25. During this period, the total output reduced by about 26,000 mt. Operating rate in Hebei (remained at 90.8%); Operating rate in Guangxi (+2.1% MoM to 84.4%): The growth was mainly contributed by a refinery who recovered 500,000 mt of operating production capacity after production reduction due to insufficient ore supply. In addition, natural gas pipeline failures forced roasters in a refinery to shut down for maintenance for 3-5 days. During this period, the total output reduced by about 24,000 mt. Operating rate in Shandong (-3.1% MoM to 92.7%), mainly as technical renovation in a refinery forced some roasters to shut down for maintenance from March 15 to May 15. During this period, the total output may be reduced by about 80,000 mt.

April forecast: Bauxite mines in Shanxi and Henan have no plans for immediate production resumptions, and production resumptions at local alumina refineries are proceeding slowly. Operating rate of enterprises that rely on imported ores fluctuate greatly. Enterprises in Henan have higher efficiency in increasing and resuming production. A refinery in Guizhou, which halted production for maintenance will restart in early-April. 400,000 mt of local production capacity has not yet recovered. In Guangxi, unstable ore supply forced a refinery to suspend production for around 12 days in early April. Before the production resumption, the operating production capacity was 500,000 mt. In addition, a refinery in Guangxi will resume its production capacity to 2.2 million mt in early April following maintenance. Taken all together, SMM sees China’s daily average alumina output at 221,800 mt/day in April and total operating capacity at 80.96 million mt, up 1.84% YoY.