Chinese aluminium output climbs to record highs
Still, China’s aluminium output has held up despite the energy crunch. The country’s primary aluminium production hit a record in August surging 9.6% year-on-year to 3.51 million tonnes, according to data from the National Bureau of Statistics, beating the previous high in July. Output in the first eight months of the year gained 2.1% to 26.47 million tonnes.
However, output could have been constrained over September due to the ongoing power rationing in Yunnan province.
China’s exports of unwrought aluminium and aluminium products have also risen in 2022 - up 31.5% so far this year versus a year earlier to 4.7 million tonnes - and are likely to rise further in the fourth quarter as European and the US producers have been slashing capacity over the past 12 months amid the worsening energy crisis following Russia’s invasion of Ukraine.
In August, China exported 540,400 tonnes of unwrought aluminium and aluminium products, up 10.2% versus a year earlier.
Meanwhile, imports dropped 19% from a year earlier, reflecting muted domestic demand, record-high domestic production and tightening overseas supply. The country brought in 200,400 tonnes of unwrought aluminium and products in August, according to customs data.
On the raw material side, China’s alumina exports are also increasing, with annual shipments through August reaching 720,000 tonnes, from just 100,000 tonnes a year earlier as buyers in Russia seek alternatives after the war in Ukraine cut off their traditional supplies.
Globally, despite Chinese smelters facing energy rationing and European smelters slashing output, global aluminium production rose 3.5% year-on-year in August to 5.89 million tonnes, according to the International Aluminium Institute. Global year-to-date output totalled 45.448 million tonnes.
Several smelter cuts have already been announced across Europe since December 2021, including Alcoa’s San Ciprian smelter and Hydro’s plant in Slovakia due to high energy costs which account for about a third of aluminium’s production costs.
About 1.48 million tonnes of capacity could be cut in Europe and the US, accounting for 1.9% of the global total. European smelters have already cut 1.18 million tonnes of output – around 11% of total installed capacity in the region.
Further smelter closures and curtailments in production are highly likely with Europe heading into the winter months and the war with Russia raging on.
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