China Aluminium Production Up By 3.2 Percent In June

China Aluminium Production Up By 3.2 Percent In June

Production of primary aluminium in the People’s Republic of China was off by 0.9 percent on the month in June, but it was better by 3.2 percent on the year, likely due to an increase in aluminium prices over last year.

According to data released by Antaike last week, Chinese producers churned out 3.39 million metric tons of primary aluminium last month, just slightly under May’s aluminium production total of 3.42 million metric tons, which was a record.

Experts say the surge in aluminium production in the first half of the year was driven by a rise in aluminium prices in the year’s opening quarter, which was itself partly a product of Russia’s invasion of Ukraine and the resulting supply chain disruptions.

The increase in prices drove an aluminium production increase in the Middle Kingdom, including the bringing online of new and formerly shuttered capacity. Production rose despite the reimposition of COVID-19 lockdowns in some cities in China, which took a bite out of demand.

In addition, the rainy season in southern China spurred hydropower production in Yunnan, which now houses about a tenth of the country’s overall aluminium capacity, resulting in a boost in aluminium production as well.

CRU Group analyst Min Wang told Reuters last week that aluminium producers remain poised to increase production in the coming months.

“Chinese producers are on track to ramp up their production amid looser electricity controls, while demand has been weakening as a result of mixed factors amid the pandemic.”

Wang went on to say that a large number of primary aluminium producers in China are counting on markets outside of China to make up for sagging demand domestically.

Last month aluminium producers sent 607,443 metric tons overseas, off by 10.2 percent on the month from 767,605 metric tons, which was a record. Last month’s total was a spike in 71.6 percent from last June.