November 14, 2019 / 3:46 AM / a month ago

UPDATE 1-China Oct aluminium output slips on smelter shutdowns

(Adds details, consultant quote)

By Tom Daly and Emily Chow

SHANGHAI/QINGDAO, Nov 14 (Reuters) - China’s aluminium production in October fell 0.7% from the previous month, official data showed on Thursday, as smelter shutdowns continued to weigh on output.

China, the world’s biggest producer and consumer of aluminium, churned out 2.88 million tonnes of the metal last month, the National Bureau of Statistics said. That was slightly down from 2.9 million tonnes in September and down 1.8% from a year earlier.

On a daily basis, output averaged about 92,900 tonnes per day in October, according to Reuters calculations, its lowest since March 2019. This is down from 96,700 tonnes per day in September, which had one less day.

In the first 10 months of 2019, China produced 29.24 million tonnes of aluminium, up 0.7% from a year earlier, leaving it on course for record annual output.

Top producer China Hongqiao Group’s facilities were hit by flooding in August and Xinfa Group also closed pot lines due to an explosion a week later. Smelting lines usually take several months to fully resume production.

“We’ve had several accidents and flooding issues which impacted capacity, so that is the major reason why we are seeing the decline,” said Jackie Wang, an aluminium consultant at CRU in Beijing.

“New ramp ups have also been delayed so this is probably within people’s expectation. Our numbers show we will see primary aluminium output decline year-on-year in 2019, by about 1.7%, but for 2020 we expect to see a big increase in primary output as new projects come in.”

Hongqiao Group Chairman Zhang Bo said on Thursday, however, that it will not cut any aluminium production this winter, having already closed some capacity after floods this year.

Shanghai aluminium prices dipped by 0.7% over September and remain below the 14,000 yuan a tonne mark often considered a break-even for Chinese smelters.

It remains unclear how many tonnes of aluminium production might be cut due to curbs on industrial output during China’s peak winter heating season that begins on Nov. 15.

China’s production of 10 nonferrous metals - including copper, aluminium, lead, zinc and nickel - was 4.97 million tonnes in October.

That was flat from September but up 4.6% from a year earlier, the bureau said.

The January-October output for the group of 10 nonferrous metals rose 4.6% year-on-year at 48.15 million tonnes.

The other metals in this group are tin, antimony, mercury, magnesium and titanium. (Reporting by Emily Chow in Shanghai and Tom Daly in Qingdao, China; Editing by Tom Hogue and Muralikumar Anantharaman)

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