NBS: China's primary aluminum output rises 2.7% YoY in March

On a per-day basis, national output averaged 124,194 tonnes last month, marking a 2.8% increase from a year earlier, Mysteel Global's calculation based on the NBS data showed.

The monthly production volume aligned with the findings of Mysteel's monthly survey, which showed that the 89 primary aluminum smelters under its regular tracking produced 3.845 million tonnes in March, up 3.1% on year.

The increase in output was mainly driven by the commissioning of new primary aluminum projects in Inner Mongolia and Liaoning during the month. These projects utilized capacity quotas acquired from previously idled capacity or outdated facilities at other smelters, according to market analysts. Across the country, most smelters maintained steady operating rates, supported by improved profitability and rising aluminum prices. 

During March, domestic primary aluminum prices were underpinned by bullish sentiment, as market participants anticipated tighter global supply following production disruptions in the Middle East amid the escalating geopolitical tensions there since late February.

On March 31, Mysteel assessed the national average spot price for primary aluminum ingots with a minimum purity of 99.7% at Yuan 24,610/tonne ($3,610.3/t), up 5.1% from a month earlier.

However, elevated prices weighed on procurement among users of the light metal. Despite March-April traditionally being peak consumption months for primary aluminum in China, end-users and intermediate processors remained cautious, limiting buying activity. This contributed to a notable build-up of inventories.

By the end of March, total retail stocks of primary aluminum being held in warehouses in 16 major cities monitored by Mysteel reached 1.4 million tonnes, rising by 18.9% on month and surging by 73.3% on year. 

During this year's first three months, China produced 11.41 million tonnes of primary aluminum, up 3.1% from the January-March period last year, the NBS data showed.

Written by Iris Pang, pangjunyu@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com