Aluminium smelters in Xinjiang maintained high operating rates and shipments were normal

SHANGHAI, Aug 15 (SMM) –

Based on the statistics from SMM, Xinjiang's installed aluminium production capacity has soared to 6.18 million mt, within the regulatory guidelines, comprising 15% of China's total output, and standing as the third highest nationally. The reliable output primarily stems from the region's abundant coal supply and low-cost electricity, sustaining an operation rate consistently over 99%. As of July 2023, Xinjiang's cumulative aluminium production has reached 3.5675 million mt.

Xinjiang stands out not only for its substantial production capacity and high operational rate, but it's also a principal hub for aluminium ingot production within China. Given its remote proximity from the major consumer regions of aluminium processed goods, such as aluminium rods and billets, coupled with the lack of downstream processing companies, the demand for molten aluminium remains relatively limited. As a result, the logistics and sales of aluminium ingots are more convenient. In 2023, Xinjiang's share of molten aluminium was estimated at about 46.17%, with a total aluminium ingot output close to 1.9206 million mt, placing it at the top nationwide.

Of late, the stockpile of domestic aluminium ingots has consistently been at a low level, with a noticeable constraint in spot circulation within Central and Eastern China regions. Feedback from certain companies indicates a shortage of supplies arriving from the Northwest, a repercussion of transportation capacity being commandeered for flood relief and the transport of melons and fruits. However, SMM illustrates that the dispatch of products, such as aluminium ingots from Xinjiang, are largely unimpeded, with no significant accumulation. Predominantly, these products from Xinjiang are shipped to key markets in Eastern and Southern China, maintaining a steady transportation flow.

According to observations by SMM, the current transportation of aluminium ingots in Xinjiang remains largely unaffected. Despite the fact that floods in regions such as Beijing, Tianjin, and Hebei have disrupted some supply arrivals from Inner Mongolia, a portion of the aluminium ingots are still projected to be en-route to the warehouses. SMM data reveals that as of August 7th, the domestic stockpile of aluminium ingots was 517,000 mt, marking a decrease of 8,000 mt since the previous Thursday and a drop of 170,000 mt compared to the same period in August 2022. This continues to represent a five-year low compared to the same period of previous years.

On the first weekend of August, a marked uptick was observed in the overall delivery volumes of domestic aluminium ingots. To elaborate, inventory levels rose in Foshan, Tianjin, and Chongqing, while those in Gongyi, Shanghai, and Wuxi experienced a downturn. Other regions exhibited relative stability. Wuxi and Foshan saw a replenishment of deliveries over the weekend, although the figures still fell short compared to prior levels. In Gongyi, an increase in arrivals coupled with a slower storage ingress rate resulted in a decrease in inventory. It is projected that with subsequent warehouse entries of aluminium ingots, a modest upward trajectory in the domestic aluminium ingot inventory can be anticipated.