SMM analysis: In September, domestic aluminum production increased by 1.45% YoY

SMM, Oct 10: According to SMM statistics, as of October 9, 2024, domestic aluminum production in September (30 days) was up 1.45% YoY. The capacity in Sichuan and Guizhou, which had previously halted for technical upgrades, gradually resumed production, leading to a steady increase in domestic aluminum operating capacity.
During the September-October peak season, the production and demand for downstream alloy products rebounded, driving the proportion of liquid aluminum up by 0.7 percentage points MoM and 0.6 percentage points YoY to approximately 73.76%. According to SMM's liquid aluminum proportion data, the casting ingot production in September decreased by 0.67% YoY to around 937,900 mt.

Capacity changes: By the end of September, SMM statistics showed that the existing capacity of domestic aluminum was about 45.36 million mt, with an operating capacity of approximately 4,351 mt, and the industry's operating rate increased by 0.94 percentage points YoY to 95.96%. In the month, the capacity in Sichuan and Guizhou, previously halted for technical upgrades, gradually started production, with output expected to reflect in October and November.

Production forecast: Entering October 2024, domestic aluminum operating capacity is expected to slightly increase, mainly due to the continued resumption of upgraded capacity in Sichuan and Guizhou, and the initiation of replacement projects in Xinjiang. Additionally, this year, Yunnan's power supply is relatively sufficient, reducing the expected production cuts. SMM expects the annualized operating capacity of domestic aluminum to reach 43.63 million mt/year by the end of October. As October marks the end of the peak season, and with the impact of environmental protection policies in north China affecting local production, combined with aluminum prices fluctuating at highs, some end-use sectors are adopting a wait-and-see approach, which may negatively impact the demand for aluminum billets and other alloy products. It is expected that the proportion of liquid aluminum will adjust to around 73% in October. Continued attention is needed on the resumption of aluminum production in various regions and the operating conditions of downstream sectors like aluminum billets.