China's primary aluminum output is expected to reach 38.9 million mt in 2021, up 4.3% from a year earlier, but the estimates were still below the 40 million mt forecast made earlier this year, China's state-owned research agency Antaike said late Dec. 24.
China's alumina output is likely to reach 75.2 million in 2021, also rising from the year-ago levels, the agency said.
In view of anticipated economic growth and increasing coal supply in China, power restrictions may have lesser impact on primary aluminum production in the coming year. However, the output increase would be limited, Antaike said.
Primary aluminum
China's move to implement tough energy consumption controls impacted production of primary aluminum smelters throughout the year in 2021, leading to output curbs.
China's aluminum industry saw an eventful year as severe power shortage in September, along with natural disasters and production accidents kept the sector on a tight leash.
2021 also marks the first year after China released carbon emission targets, including reaching carbon neutrality before 2060, Antaike said.
In 2021, Chinese smelters have cut a total capacity of 3.8 million mt/year while new capacity only reached 450,000 mt/year, according to Antaike. Smelters also resumed about 1.23 million mt/year of idled capacity, a move mostly driven by high profit margins.
China had an installed capacity of 43.25 million mt/year at the end of December, up 0.93 million mt/year compared to the same period last year. Running capacity has reached 37.7 million mt/year, down nearly 2 million mt/year from last year, Antaike said.
Some Chinese smelters that faced losses due to production hurdles seen earlier in the year have managed to turn the tide in December, marking gains as aluminum prices jumped and production costs declined, the agency said. In November, the industry reported an average loss of Yuan 1,780 on every mt produced, Antaike data showed.
Alumina
China's rising alumina output in 2021 was attributed to new capacity that came online in Guangxi and Guizhou.
China has put 1.7 million mt/year new alumina capacity into operation in 2021, according to Antaike.
At the end of December, China's total alumina production capacity reached 90.35 million mt/year, up 1.7 million mt/year from the last year.
The all-in production cost of alumina in December rose 19.8% from a year earlier, reaching Yuan 2,684/mt, Antaike data showed.
Chinese refineries saw a significant increase in their profit margins from September through November, but margins fell sharply in December amid falling alumina prices.
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