China's March aluminium output drops to lowest since October

China's aluminium production fell 3.6 percent on a daily basis in March from the previous two months to its lowest rate since October, according to calculations based on official data, pressured by winter curbs on industry and low prices for the metal. The world's top aluminium-producing country churned out 2.88 million tonnes of primary metal last month, up 3.4 percent year-on-year, according to data issued on Wednesday by the National Bureau of Statistics. Year-to-date output was up 3.9 percent at 8.57 million tonnes.
The March number works out at around 92,900 tonnes per day, according to Reuters calculations, down from around 96,400 tonnes per day in January-February and the lowest daily rate since around 87,600 tonnes per day in October.
The bureau does not typically provide individual monthly numbers for January and February due to the distortion of the Lunar New Year.
Jackie Wang, an analyst at CRU in Beijing, said the consultancy estimates close to 2.7 million tonnes of annual smelting capacity in China has been closed since a slump in aluminium prices began in the second quarter of 2018. "We haven't seen any restarts yet (from the affected smelters)," she said.
Environment-related winter curbs on industrial output, including aluminium, in northern China ended in the middle of March, although some had expired at the end of January. It can take several months for smelters to ramp up to full output after switching their pots back on.
Shanghai aluminium prices remained flat over March. They are up 2 percent year-to-date, however, and almost back at the average break-even level of 14,000 yuan ($2,087.90) a tonne.
For Chinese smelters, such a price would be much preferable to levels of around $13,500 a tonne seen for much of the first quarter, Wang said, noting that signs of progress in the US-China trade talks and the arrival of the second quarter, China's peak aluminium demand season, had boosted sentiment.
"The really strong export number in March was also a positive sign," she added.
China's aluminium exports last month rebounded from a two-year low in February to 546,000 tonnes, their second-highest level on record.
Meanwhile, output of 10 nonferrous metals - including copper, aluminium, lead, zinc and nickel - came in at 4.67 million tonnes in March, up 6.9 percent year-on-year, the bureau said. Year-to-date output was up 6.3 percent at 13.7 million tonnes. The other metals in the group are tin, antimony, mercury, magnesium and titanium.