BEIJING (Reuters) - China’s daily aluminium output hit record levels in June, according to Reuters calculations, even as total production for the whole of the month fell slightly according to data released by the National Bureau of Statistics on Monday.
The world’s top aluminium producing country churned out 2.97 million tonnes of the metal last month, the bureau said. That was down from 2.98 million tonnes in May, but up 1.3% year-on-year.
On a daily basis, output averaged 99,000 tonnes in June, according to Reuters calculations. That was up from around 96,000 tonnes in May, and surpassed the previous record of around 98,400 tonnes, sent last December.
The daily record high followed a jump in Shanghai aluminium prices SAFcv1 to as much as 14,380 yuan (1,664.4 pounds) a tonne in May, turning margins positive again for some smelters and incentivising ramp-ups.
But prices fell by 2% in June, and currently sit below the 14,000 yuan ($2,035.92) mark that is considered a break-even threshold for many Chinese smelters.
Jackie Wang, an aluminium analyst at CRU in Beijing, said the high June number was likely explained by ramp-ups at projects in Yunnan and Guizhou, both in southwest China.
The price of alumina, a substance used to make aluminium metal, has also been on the decline since the second half of June, Wang said, easing the pressure on smelter margins. “If their costs decrease they can continue to operate,” she added.
Local employment rate considerations may prevent closures being made at smelters if aluminium prices remain low, “but we may see the ramp-ups slow down,” Wang said.
Meanwhile, June production of 10 nonferrous metals - including copper, aluminium, lead, zinc and nickel – rose 3.4% from May to 4.9 million tonnes. That was also up 5.7% year-on-year and the second-highest monthly total on record.
Nonferrous output for the first half of 2019 was up 4.3% year-on-year at 28.34 million tonnes. The other non-ferrous metals are tin, antimony, mercury, magnesium and titanium.
Reporting by Tom Daly; Editing by Kenneth Maxwell
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