The per-day aluminium production of smelters in the People’s Republic of China fell by 3.6 percent in March, dropping to a nadir not seen since last fall. Such was the picture painted by numbers released by Reuters yesterday, which were derived from figures announced by the National Bureau of Statistics earlier in the day.
Per Chinese statistics, the country’s aluminium sector combined to produce 2.88 million metric tons of primary aluminium in the year’s third month, good for a 3.4-percent increase on the year. Production was up by 3.9 percent for the year through the end of March, totaling 8.57 million metric tons.
According to Reuters, the daily production last month averaged approximately 92,900 metric tons, off from January’s and February’s average daily output of around 96,400 metric tons. March’s total is the lowest seen in China since October’s daily production average of 87,600 metric tons.
CRU analyst Jackie Wang explained to Reuters yesterday that the decline may be due to a projected cut in aluminium smelting capacity of 2.7 million metric tons per annum since the middle of last year.
“We haven’t seen any restarts yet (from the affected smelters),” she said.
The drop in daily output is notable due to the fact that March’s numbers were below February’s total, which was affected by the Spring Festival, and December’s and January’s totals, which saw the aluminium industry hamstrung by mandatory winter production cuts.
Also working against production in March was the tepid price of the metal in Shanghai. However, experts are quick to note the 2-percent rise since the start of the year, which has lifted prices ever so slowly to the break-even point of CNY14,000 (US$2,087.90) per metric ton.
However, hopes of a détente in the U.S.-China trade war, coupled with the arrival of the yearly peak-demand season, may spark an improvement in aluminium production going forward. Last month saw a recovery in aluminium exports to 546 thousand metric tons, bouncing back from a two-year worst the month prior.
“The really strong export number in March was also a positive sign,” Wang opined.