China Nonferrous Metals News
Operational domestic primary aluminium capacity rose by 580 ktpy from end-2019 to 37.22 mtpy by end-February 2020. Despite the impact of COVID-19 interrupting the commencement schedule of some new projects, a total of 100 ktpy~200 ktpy primary aluminium capacity is expected to come online or be resumed in March 2020, driving up capacity overall.
Problems caused by COVID-19 have, however, hit hard on the demand side. As of 27th February, total primary aluminum inventory (aluminium ingot and aluminium rod) at social warehouses reached 1.62 mln t, rising from 829 kt which was held prior to the CNY holiday. Furthermore, aluminium stocks at smelters are at approximately 440 kt, far exceeding previous anticipation. As of this week, approximately 50% of downstream aluminium processers are operational, and full resumption in China (except Hubei) can be expected in mid – late March according to optimistic estimates.
As a result, with rising supply and continuing depressed demand, social aluminium inventory is likely to lift to 2 mln t in the short-term and continue to weigh on prices, leveraging them down to RMB12,500/t.