Operating rate of alumina refineries in Shanxi and Henan hit a new low in the past year, and production decreased by 1.10% month-on-month in January [SMM data]

SMM data shows that in January (31 days), China's metallurgical-grade alumina production was 6.72 million mt, and the average daily production decreased by 9,800 mt/day from the previous month to 216,800 mt/day. The total output in January decreased by 1.10% compared with December 2023 and increased by 5.5% year-on-year. As of the end of January, China's alumina production capacity was 100 million mt, its operating capacity was 79.14 million mt, and the national operating rate was 79.1%.

In terms of regions, in Shanxi, the province's operating rate in January was 66.7%, down 2.5% from December. This was mainly because some alumina plants in Shanxi were forced to cut production due to the deepening tightness of local ore supply in January. Production was reduced, so the operating rate declined month-on-month. In Henan, the province's operating rate was 56.7% in January, down 5.2% from the previous month. In January, some alumina plants in the Sanmenxia area further reduced or suspended production due to insufficient ore supply. Some alumina plants were partially roasted due to local heavy pollution weather warning restrictions, production capacity, and later resumed production in early February due to the lifting of the local heavy pollution weather warning. In the Guizhou, the production of individual alumina plants was affected by equipment maintenance, and the output decreased slightly during the month. At the same time, individual alumina plants were driven by current profit margins and downstream demand and were more willing to increase production. In January, the operating capacity increased by 100,000 mt, so the operating rate in Guizhou Province increased by 1.5% month-on-month to 86.0% in January; the alumina production in Hebei was generally stable in January, and the operating rate increased slightly by 0.8% from last month, returning to 88.3%; in Guangxi, the operating rate dropped slightly by 0.8% from December to 84.1%. In January, individual alumina plants in Guangxi had an output of about 25,000 mt due to insufficient ore supply and equipment maintenance. In Shandong, the province's operating rate increased in January compared with December. In late January, some alumina plants in Shandong experienced frequent roasting capacity restrictions due to local heavy pollution weather warnings. Later, as the local heavy pollution weather warnings were lifted, the company resumed normal production in early February. In addition, the alumina production situation in Shandong is generally stable.

Forecast for next month: According to SMM research, currently suspended mines in Shanxi and Henan have no plans to resume production in February. The shortage of local ore supply will continue to limit some production capacity, and the overall operating rate may remain at a low level; in Guangxi, it is difficult for companies that have suppressed production due to ore supply problems to return to full production in the short term; an alumina plant in Guizhou region suspended production in early February due to shutdown in mines, and initially planned to resume production in late February. Production is expected to decrease within the month, and in Shandong and Henan, some roasting production capacities restricted by environmental protection policies have now resumed normal production. However, heavy pollution weather occurs frequently in the northern region at the end of the year, and the expectation of another production restriction cannot be ruled out. Therefore, SMM predicts that the average daily output in February 2024 will be 217,400 mt/day. The total operating production capacity is about 79.34 million mt, a year-on-year increase of 0.25%.