March aluminium production - Are you kidding?

The production data for March came out last night, and the data that was published destroys any remaining credibility for the people who put the number together.

According to the statistics page on the IAI, China aluminium production was 2.6 million tonnes in March. That compares to 2.07 million tonnes in February and 2.5 million tonnes in January, a month which also has 31 days.

And it’s the daily figure that destroys any sense of authority. Dividing the numbers out, it means that daily production went from 80,000 tpd in January to 71,000 in February, to 84,500 in March. They would have us believe that daily metal production dropped by 11% in February but grew by 19% in March? Assuming daily production per pot of say 2.5t, it means that 5,400 pots suddenly sparked up on March 1st. That’s something like 10 smelters running at full speed on March 1st, after being idle on February 29.

This is not the IAI’s fault. They rely on their member organisations feeding the official country data in to the IAI. The IAI rightly expects that member organisations will treat the statistics with respect and integrity. This SNAFU* is the CNIA’s work.

Perhaps the official production data is meant to be taken as an indicative guide, with no sense that the numbers are real. But if that’s the case, why wait until the 21st of the month to publish the number? Surely it’s possible to poll just under 100 smelters in 3 weeks. They could call 8 smelters per day - say one per hour - and have the entire population of Chinese smelters covered in less than 2 weeks.

I am writing this post ahead of the market opening this morning, so it remains to be seen how the market will take this news. I suspect it will have only a small impact, since most players already know that production is running higher than the officials would have us believe. But it would be nice if the production data was somewhere close to accurate - or even remotely close.

*SNAFU = “Situation Normal, All Fouled Up.