In the first two months of 2010, China’s aluminum production rose by 2/4% year-on-year despite the demand being hit by coronavirus, as last year’s smelting capacity commissioned late, taking supply higher.
According to the National Bureau of Statistics, in the January-February period, China produced 5.85 mt of aluminum, with an average of 97,500 tpd. The level was down from roughly 98,000 tpd in December.
The supply was added by the first 150,000 ton phase of Yunnan Shenhuo’s smelter at the end of last year.
However, this rise in output was not welcomed by the cold demand, as factories processing primary aluminum were slow to restart after the extended holiday in an attempt to contain the coronavirus since they were short of workers.
Aluminum inventories in the Shanghai Futures Exchange more than doubled this year to around 500,000 tonnes. Analyst Paul Adkins of AZ China estimated there were another 300,000 tonnes undelivered in the smelters.
Smelters face more challenges as the Shanghai aluminum prices were near the lowest since July 2016 at about CNY12,750/ton (USD1,823.04/ton). The average cost of production is in the range of CNY13,100-13,200/ton (USD1,871.3-1,885.6/ton), which meant there would be almost CNY500 (USD71.4) deficit.
In general, the country’s output of 10 nonferrous metals climbed by 2.2% year-on-year to 9.35 mt in the first two months.
