Domestic alumina prices have recently been rising, as a consequence of environmental checks in Shanxi forcing suspensions at some local refineries. As of 13th May, domestic alumina quotations averaged RMB 2,803/t. Increasing alumina prices have leveraged up the production cost of primary aluminium – shoring up prices.
Primary aluminium capacity in operation remained at low levels during the first four months of 2019 due to continuous losses between June 2018 and February 2019. Some domestic primary aluminium capacity resumed operations in April, but limited output was generated within the month. Domestic primary aluminium capacity in operation reached 36.23 mtpy, representing an operational rate of 88.8%. SMM forecast domestic alumina output to increase to 3.02 mln t in May. Meanwhile, if the stable consumption status continues, inventory of domestic aluminium is expected to drop to approximately 1.3 mln t in May.