According to data released on a Monday, China’s primary aluminum output increased from the previous year. Smelters in the southwestern Yunnan province resumed production as curbs on local power usage were eased, resulting in a 2.9% year-on-year increase. The country, being the world’s top aluminum producer, churned out 3.46 million metric tons of primary aluminum in the mentioned month.
The resumption of power supplies to the industry in Yunnan followed increased rainfall in the region, which relies heavily on hydropower. As a result, around 500,000 metric tons of annual capacity had been restored since the start of the second quarter. However, this capacity was expected to come to the market gradually due to commissioning delays.
Smelters, which had reduced production since the previous September due to power curbs, ramped up their production due to high profits, reaching up to 4,000 yuan ($558.02) per metric ton. Additionally, lower thermal coal and alumina prices in the previous month made it cheaper to produce aluminum.
Despite the slight gain in the most-traded aluminum contract on the Shanghai Futures Exchange, the demand for aluminum remained low, leading to expectations of rising inventories in the transportation, construction, and packaging sectors.
In the first half of the year, China’s primary aluminum output totaled 20.16 million metric tons, reflecting a 3.4% increase from the corresponding period in the previous year. China’s non-ferrous output in June also rose by 6.1% year-on-year, reaching 6.15 million metric tons. The total output for the first half of the year was 36.38 million metric tons, an 8% increase from the same period in the previous year.
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