(Adds analyst’s comments)
Nov 16 (Reuters) - China’s monthly aluminium output in October rose 9.7% from a year earlier to a record high, official data showed on Monday, as new smelting capacity ramped up to cash in on strong prices.
The world’s top aluminium-producing country churned out 3.20 million tonnes of the primary metal last month, which was up 1.2% from 3.162 million tonnes in September, the National Bureau of Statistics said.
Consultancy Baiinfo estimates 245,000 tonnes of annual aluminium production capacity was commissioned in China in October, almost half in the emerging smelting hub of Yunnan province, with the remainder in Sichuan and Inner Mongolia.
Hu Bin, an analyst with Founder CIFCO Futures, noted 1.955 million tonnes of new capacity had been put into production from January to Nov. 12 and that high aluminium prices encouraged smelters to produce more aluminium.
National output in the first 10 months of 2020 rose 3.5% year-on-year to 30.63 million tonnes, the bureau said, keeping China on course to set a new annual production record this year after a rare drop in 2019.
Unlike previous years, analysts expect Chinese smelters to cut little or no aluminium output over the 2020/21 peak winter heating season in northern China as most have upgraded facilities to meet new emissions standards and are not required to reduce production for environmental reasons.
Smelters can therefore make the most of strong Shanghai aluminium prices, which rose 2.9% in October and are trading near three-year highs above 15,500 yuan a tonne on dwindling inventories, providing healthy margins.
Meanwhile, China’s production of 10 nonferrous metals - including copper, aluminium, lead, zinc and nickel - in October rose 9% year-on-year and 2.4% from September to 5.45 million tonnes, also setting a record monthly high.
January-October output for this group - which also includes tin, antimony, mercury, magnesium and titanium - was up 4.3% year-on-year at 50.69 million tonnes, likewise on course to set an annual record.
“Overall stimulus towards nonferrous metals is good, so is downstream demand...output is expected to continue to grow steadily in the rest of the year,” Hu said. (Reporting by Shivani Singh, Min Zhang and Tom Daly; Editing by Jacqueline Wong and Chris Reese)
Our Standards: The Thomson Reuters Trust Principles.