Aluminum Reaches A New High Of 40.21M Tonnes

China’s Output Of Aluminum Reaches A New High Of 40.21M Tonnes

According to official data released on Tuesday, China’s annual output of aluminum in 2022 increased 4.5% from the previous year to a record high, reaching 40.21M tonnes thanks to newly launched capacity and the loosening of power supply constraints.

The National Bureau of Statistics (NBS) reported that the primary aluminum output for December was 3.43M tonnes, up marginally from 3.41M tonnes in November and 10.3% higher than a year earlier.

Due to higher spot prices, smelters’ income also increased in December. According to local industry information provider Mysteel, smelter profit increased by 288 yuan ($42.63) per tonne monthly. The output in December was approximately 110,645 tonnes per day, compared to approximately 113,667 tonnes in November.

Smelters ramped up production in general in 2022 due to loosened electricity use regulations and the opening of additional capacity, mostly in Inner Mongolia in the north and Guangxi and Yunnan provinces in the southwest.

The price of the light metal utilized in the building, transportation, and packaging industries, was under pressure due to rising domestic supply and sluggish, pandemic-affected demand.

In 2022, the most active aluminum contract on the Shanghai Futures Exchange, ALI1!, averaged 18,685 yuan a tonne, down from 19,940 yuan in the previous year.

According to Lucy Tang, a metals analyst at S&P Global Commodity Insights, a rise in domestic aluminum demand is predicted in 2023 as China anticipates a recovery in the real estate market following the relaxation of COVID regulations.

Aluminum in China and Europe

According to a metals analyst, continued expansion in the photovoltaic and new energy vehicle sectors can also provide support. As a result of increased demand, the output should increase even more. According to CITIC Futures Research, production will increase by around 6% from 2022 to 42.44M tonnes this year.

Despite falling inventories and expectations of significant deficits due to the persistence of the power crisis, particularly in Europe, and the need for smelters to reduce production, aluminum prices continued to rise in January, reaching above $2,900 per tonne, the highest level since late October 2022.

The largest aluminum smelter in Europe, Aluminium Dunkerque Industries France, plans to cut production by 15%. At the same time, the second-largest, Alcoa Corp., will cease aluminum production at its Spanish facility for two years. Since the middle of March, aluminum inventories in LME-approved warehouses have decreased by more than 50%. Meanwhile, a ban on thermal coal export from Indonesia has resulted in a spike in coal costs, which will probably cause both China’s and India’s aluminum production to decline.

10 nonferrous metals, including copper, aluminum, lead, zinc, and nickel, saw an output increase in December from 7.3% to 5.95M tonnes. Production for the entire year increased by 4.3% to a record-high 67.74M tonnes. Tin, antimony, mercury, magnesium, and titanium are the other non-ferrous metals included in this group.

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