China’s aluminum production in December was 2891Kt, according to the IAI. It remained flat with November’s daily production number. It is a daily run rate of 93,000t per day.
If you subscribe to our weekly reports, you must have noticed the added capacity news from restarts and new projects in recent months. Hardly a week goes by without 3-5 smelters restarting pots. Based on our pipeline reports, there was at least 993Kt operating capacity increased from November to December. Despite all the extra capacity, there was no increase in reported production.
The key here is in the word “reported”.
When we checked the historical data, we noticed that in the last five years, December production has been low, but always followed by a jump in the following January.
We also noticed China’s February production volume was lower than January for the last 4 years running. In many cases over the last several years, the output in March also jumped, though in a couple of cases it slipped back.
There are several possible explanations for this apparent cycle of “reporting low then high”. It could be that in the winter months and over Chinese New Year, the relevant people at the smelters cannot be reached. It could be because the CNIA is using a cycle starting not at the start of the month but perhaps “25th t0 24th” of each month. It could also be because some people do not want to report too high coming into the end of the year, so deliberately bump some production back a month or two.
The least likely reason is that it is really true and correct.
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