SINGAPORE: China’s October aluminium output rose from a year earlier, official data showed on Friday, with a firm demand outlook and higher prices offsetting rising raw material costs.
The world’s biggest aluminium producer churned out 3.72 million metric tons of primary aluminium last month, up 1.6% year-on-year, data from the National Bureau of Statistics showed on Friday.
In the first ten months of the year, China produced 36.39 million tons, a rise of 4.3% from the same period last year, the data showed.
Smelters ramped up their operations this year as the market turned more profitable and demand improved.
In October, the main producing regions – Shandong, Xinjiang and Inner Mongolia – maintained strong operating rates, while some new capacity was added in the southwestern China, according to local media reports.
Beijing’s barrage of economic stimulus in late September and measures to revive its property market also bolstered the demand outlook for the light metal, used in construction, transportation and packaging.
Aluminium rallies on record high raw material prices
The most-traded aluminium contract on the Shanghai Futures Exchange hit over 21,650 yuan ($2,993.56) per ton earlier this month, a more than five-month high.
Higher prices offset rising production costs, even with prices of the key raw material alumina climbing as authorities in Guinea suspended exports of bauxite, used to make alumina, in an already tight market.
Local information provider Mysteel estimated aluminium production costs rose by 938 yuan per ton last month, however, thanks to higher aluminium prices, average profits increased by 128 yuan per ton.
Daily aluminium output in October averaged 120,000 tons, lower than the average of 121,667 tons in September, based on Reuters’ calculation.
Southwestern China’s dry season began this month, which will lower hydropower supply and raise power prices, leading some smelters to trim output.
Production of ten nonferrous metals – including copper, aluminium, lead, zinc and nickel – rose 0.6 % to 6.69 million metric tons from a year earlier. Year-to-date output was up 4.7 % at 65.41 million metric tons. The other non-ferrous metals are tin, antimony, mercury, magnesium and titanium.
Source: Brecorder
