China’s October Aluminium Output Rises Amid Firm Demand and Higher Prices

China's aluminium production in October 2024 rose year-on-year as a positive demand outlook and higher aluminium prices offset rising raw material costs. Official data from the National Bureau of Statistics showed that China, the world's largest aluminium producer, produced 3.72 million metric tons of primary aluminium last month, marking a 1.6% increase from October last year. For the first ten months of 2024, aluminium production reached 36.39 million tons, a 4.3% increase compared to the same period in 2023.

Smelters ramped up operations this year as the market became more profitable and demand improved. In October, major aluminium-producing regions, including Shandong, Xinjiang, and Inner Mongolia, maintained high operating rates, while some new capacity came online in southwestern China, according to local media reports. Economic stimulus measures introduced by Beijing in late September, along with efforts to revive the property market, also contributed to the improved demand outlook for aluminium, which is widely used in construction, transportation, and packaging.

The most-traded aluminium contract on the Shanghai Futures Exchange climbed to over 21,650 yuan ($2,993.56) per ton earlier this month, reaching its highest level in over five months. Higher aluminium prices helped offset rising production costs, despite an increase in the price of alumina, a key raw material. Alumina costs were driven up by Guinea's suspension of bauxite exports in an already tight market. According to local information provider Mysteel, aluminium production costs rose by 938 yuan per ton in October, but due to increased aluminium prices, average profits grew by 128 yuan per ton.

Daily aluminium output in October averaged 120,000 tons, slightly lower than the average of 121,667 tons in September, based on calculations by Reuters. The start of the dry season in southwestern China this month is expected to lower hydropower supply and raise power prices, leading some smelters to reduce their output.

Production of ten nonferrous metals, including copper, aluminium, lead, zinc, and nickel, rose by 0.6% to 6.69 million metric tons in October compared to the same month last year. Year-to-date output of these nonferrous metals increased by 4.7% to 65.41 million metric tons. Other non-ferrous metals produced include tin, antimony, mercury, magnesium, and titanium.