Shanghai Nonferrous Metals News
China produced 5.4 mln t of alumina in February 2020, of which 5.17 mln t was SGA, with daily average output of 178 kt, down 0.52% m-o-m and down 8.19% y-o-y. The impact of COVID-19 has resulted in 4.65 mtpy of alumina capacity cuts to date, reflected by reduced output in February. Improved road transport in conjunction with the reopening of some local non-SOE mines in Henan has increased bauxite stocks at local refineries back to typical levels. From late February to early March, several Henan refineries resumed operations, including Xinghua Technology (700 ktpy) and East Hope. However, Shanxi refineries who idled some or all of their capacity – including Xing’an Chemicals, Xiaoyi Xinfa, Huaqing, Liulin, Aokaida are unlikely to resume operations in the short-term as most local non-SOE mines are still under suspension. SMM forecast domestic alumina capacity in operation will drop to 62.86 mtpy in early March.
With the winter production cut period ending in mid-March, some Henan refineries will resume operation accordingly. Meanwhile, rising raw material supply in combination with an uptick in spot market prices is likely to boost resumptions by some alumina refineries. SMM forecast domestic alumina (SGA) output at 5.34 mln t in March, with daily average output falling to 172 kt.