May 15, 2018 / 2:35 AM / a year ago

China aluminum smelters ramped up output in April as prices rallied

BEIJING (Reuters) - China’s aluminum production rose in April to its highest level on a daily basis since June, as higher aluminum prices encouraged smelters to ramp up output in their first full month after the end of winter restrictions.

An employee looks at an aluminium foil roll being lifted at a plant in Binzhou, Shandong province, China May 16, 2017. Picture taken May 16, 2017. REUTERS/Stringer

Output in the world’s top producer rose by 1.1 percent to 2.77 million tonnes in April from a year earlier, according to data released by the National Bureau of Statistics on Tuesday.

That equates to 92,300 tonnes per day, the highest since June last year and up from 89,500 tonnes in March, which was one day longer, according to Reuters calculations.

During this past winter, smelters in 28 cities in northern China were ordered to cut output by at least 30 percent to limit air pollution. The restrictions ended on March 15.

Some smelters were hesitant about switching their pots back on straightaway due to low aluminum prices, high costs and a well-supplied Chinese market.

However, the United States imposed sanctions on Russian producer United Company Rusal on April 6. That pushed up Shanghai aluminum prices by 4.8 percent last month, while London aluminum prices spiked by 12.5 percent on fears of a supply shortage.

The data also reflects new capacity which has been brought on stream recently by state-run companies and far exceeded the amount of output cut over the winter.

The favorable price arbitrage kept Chinese aluminum exports buoyant despite the U.S. imposing a 10 percent tariff on aluminum imports in March.

In the first four months of the year, China produced 10.89 million tonnes of aluminum, a rise of 0.2 percent from the same period last year, the data showed.

Production of 10 nonferrous metals - including copper, aluminum, lead, zinc and nickel – rose 3.1 percent in April to 4.54 million tonnes from a year earlier.

That was slightly lower than March’s 4.55 million tonnes.

Year-to-date output was up 2.3 percent at 17.84 million tonnes. The other non-ferrous metals are tin, antimony, mercury, magnesium and titanium.

Reporting by Tom Daly and Josephine Mason; editing by Richard Pullin

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