• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 7 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 10 days Does Toyota Know Something That We Don’t?
  • 4 days America should go after China but it should be done in a wise way.
  • 10 days World could get rid of Putin and Russia but nobody is bold enough
  • 7 hours "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 12 days China is using Chinese Names of Cities on their Border with Russia.
  • 1 day Even Shell Agrees with Climate Change!
  • 2 hours The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 2 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 3 days How Far Have We Really Gotten With Alternative Energy
  • 12 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 13 days Putin and Xi Bet on the Global South
  • 13 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
Is a Deep-Sea Mining Boom Inevitable?

Is a Deep-Sea Mining Boom Inevitable?

The UN regulator overseeing deep-sea…

UK Trade Authority Probes Steel Import Quotas

UK Trade Authority Probes Steel Import Quotas

The UK's Trade Remedies Authority…

Metal Miner

Metal Miner

MetalMiner is the largest metals-related media site in the US according to third party ranking sites. With a preemptive global perspective on the issues, trends,…

More Info

Premium Content

Series Of Power Cuts Disrupt Aluminum Production In Yunnan

  • Aluminum production in China’s Yunnan province was disrupted by a series of power cuts.
  • Production in other key regions remains largely unaffected.
  • Despite this slower output growth, seasonal demand uptick and post-pandemic economic growth in China continue to reduce stockpiles of aluminum

Via AG Metal Miner

A new question mark hangs over the fate of Chinese aluminum production for the rest of 2023. In March, China’s primary aluminum output increased by 3% compared to the same period in the previous year. However, the increase occurred at a slower pace than in previous months. While this did bring some cheer, the future for both output and the global price of aluminum seems less positive.

A series of power cuts have disrupted production in China’s Yunnan province, a region that accounts for roughly 12% of China’s total aluminum capacity. Indeed, since September of the previous year, Yunnan has experienced issues with its power output due to low rainfall. These power issues continue to force electrolytic aluminum producers to reduce their power usage, resulting in slower output growth. That said, this report from MarketScreener indicates that production in other key regions remains largely unaffected.

Despite this slower output growth, seasonal demand uptick and post-pandemic economic growth in China continue to reduce stockpiles of aluminum. Therefore, proper aluminum sourcing strategies for Chinese aluminum buyers need to be taken into consideration. Aluminum stocks in warehouses monitored by the Shanghai Futures Exchange (SHFE) decreased to 274,347 tons on April 14. This represents a 12% reduction from March 17, 2021. The metal sees heavy use in the construction, transportation, and packaging sectors. Therefore, potential changes in the availability and price of aluminum could have far-reaching effects.

Aluminum Imports and Demand Up Across China

In March, China’s imports of bauxite, the main source of aluminum ore, increased by 3% compared to last year. Meanwhile, aluminum imports – including primary metal and unwrought, alloyed aluminum – rose by 1.8% YoY to 200,508 tons. Many analysts attribute this increase in demand to the better economic climate in China.

March also saw China’s aluminum imports lifted by increased demand. According to customs data, the country imported 200,508 tons of aluminum. Again, this figure includes primary metal and unwrought, alloyed aluminum. Ultimately, this is an increase of 1.8% from the same month in the previous year. In the first quarter, total imports reached 574,829 tons, marking a 7.8% increase from the corresponding period last year.

According to Reuters China’s primary aluminum production also reached 10.1 million tons in the first three months of this year. This represents a 5.9% increase from the same period last year.

Rainy Season Could Provide Relief, Avoid Changes to Price of Aluminum

Many analysts feel the severe power cuts in southwestern Yunnan province will reduce aluminum production in the country’s fourth-largest producing region.

Indeed, much now depends on the rains. Already in the first quarter of 2023, the average rainfall in Yunnan was 60% lower than the same period in rainfall-good years. This is important given that many of Yunnan’s aluminum producers and smelters run on hydroelectricity.

With roughly 2 MT of capacity, about 20% of the provincial total is currently offline. That said, expectations are high that the upcoming rainy season, which starts in late May, may bring relief.

However, even if the rains are plentiful, some smelter managers have pointed out that aluminum producers can only resume production if they can rely on a consistent power supply for at least three months. Should this not occur, there could be wide-ranging effects for the price of aluminum.

ADVERTISEMENT

Sohrab Darabshaw

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News