China’s aluminum output in July slipped for a third month, with daily average levels at the lowest since October 2020, official data showed on Monday, as continued power shortages in the south of the country kept smelter operating rates low.
The world’s top producer of the metal churned out 3.26 million tons of primary aluminum last month, the National Bureau of Statistics said. That was down 0.9 percent from June’s 3.29 million tons but up 7.4 percent year-on-year.
On a daily basis, July output works out at 105,161 tons per day, versus around 109,700 tons in June, according to Reuters’ calculations.
The aluminum hub of Yunnan, in southwest China, reimposed curbs on power consumption by producers last month, before smelters, hit by an initial round of restrictions in May, had restored operating rates.
Yunnan, which accounts for around 10 percent of China’s primary aluminum capacity, lured smelters with its usually abundant clean hydro-power resources for the energy-intensive smelting process.
However, the province has faced a power crunch in recent month due to severe drought and measures to limit pollution while electricity demand jumped.
The neighboring Guangxi region this month tightened its own restrictions on power usage by smelters in a move analysts say could shut about half a million tons of annual capacity.
“Entering July, the country’s tight electricity supply situation become more severe,” said metals consultancy Mysteel.
“In the current power shortage environment, the commissioning of new electrolytic aluminum projects in Yunnan, Guangxi, Guizhou and other places will inevitably be postponed,” it said.
