SMM Review of Aluminium Production Resumption in China in Late 2022 and Early 2023

SHANGHAI, Mar 20 (SMM) – After massive production cuts in the second half of 2022, production in Sichuan and Guizhou is currently still recovering. Smelters in Sichuan began to resume their production in September 2022, but the pace was slow. As of the end of February 2023, the operating capacity in Sichuan was about 830,000 mt and the capacity utilisation rate was around 80%. Under optimistic scenario, the operating rates in Sichuan will reach more than 90% in May-June when the rainy season arrives.

The operating rate in Guizhou stood at 53% at the end of February 2023, and the resumption of remaining capacity will mainly depend on local power supply.

A total of 1.22 million mt of capacity across Sichuan, Guangxi and Guizhou has yet to be resumed.

Smelters in Yunnan underwent a second round of power rationing in late February in order to tackle worsening power shortages. As of the end of February, the operating capacity in Yunnan stood at 3.26 million mt, with a cumulative reduction of 1.94 million mt. Judging from the current water and power supply situation in Yunnan, the time and pace of production resumption face great uncertainty. Under optimistic scenario, some capacity may resume in June when the rainy season arrives. However, the actual resumption will still hinge on local power supply situation.