SHANGHAI: China’s aluminium production rose 8.4% in the first two months of 2021 compared with the same period last year, official data showed on Monday, as smelters added new capacity and cashed in on soaring prices.
Primary aluminium output in China, the world’s biggest aluminium producer, was 6.45 million tonnes in January and February combined, the National Bureau of Statistics said. It combined data for the first two months to account for the distortions of the week-long Lunar New Year holiday.
The data suggests output averaged around 109,300 tonnes per day in January-February, versus around 105,400 tonnes per day in December and beating the previous record of about 106,000 tonnes in November.
China added 220,000 tonnes of annual aluminium production capacity in January and February, all of it in the emerging smelting hub of Yunnan province in Southwest China, according to consultancy Aladdiny.
Shanghai aluminium prices fell 3.3% in January but surged 16.3% in February to hit 9-1/2-year highs above 17,500 yuan per tonne at the end of the month. The rally was driven by concerns restrictions on new capacity in China’s Inner Mongolia region would leave the market short of supply.
A strong recovery in China’s aluminium demand since the cornavirus-led collapse in early 2020 had already pushed prices way above smelters’ break-even levels, giving them an incentive to produce as much metal as possible.
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