LONDON (Reuters) - Daily average primary aluminum output hit a record high in September, driven by buoyant output in top producer China, data from the International Aluminium Institute (IAI) showed on Thursday.
The global daily average rose to 164,600 tonnes from 159,800 in August while total Chinese output for the month increased to 2.75 million, the highest in 15 months.
“The rally in Shanghai aluminum prices so far this year has improved profitability and is encouraging restarts. There are also ongoing additions to capacity,” said Caroline Bain, senior commodities economist at Capital Economics in London.
Last year loss-making Chinese smelters shut millions of tonnes of capacity, but prices surged nearly a fifth from a low in January to a 13-month peak in August.
Paul Adkins, managing director of Beijing-based consultancy AZ-China, said there had already been 1.8 million tonnes of restarts so far this year.
“Other than the restart volume, new (Chinese) capacity reached 2.9 million tonnes this year. Based on our record, there will be another 1.3 million tonnes of new capacity entering the market,” Adkins told the Reuters Global Base Metals Forum.
China’s output is expected to continue rising, which will lead to benchmark aluminum prices falling to $1,550 a tonne by the end of the year, Bain said in a note.
Three month prices on the London Metal Exchange touched the lowest in nearly a month on Thursday at $1,608, down from the August peak of $1,709. [MET/L]
Total global primary aluminum production increased to 4.937 million tonnes, up 1.2 percent from the same month last year, but North American output fell 11 percent to 325,000 tonnes, IAI data showed.
Reporting by Eric Onstad
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