China sees record Al production in November

China's production of primary aluminium reached a new record in November, as more capacity came on line amid strong demand even as China has also become a major importer of aluminium this year.

China's aluminium output grew by 8.7pc on the year to 3.18mn t in November, the country's National Bureau of Statistics said. January-November production increased by 4pc to 33.82mn t.

Producers are looking to take advantage of strong prices, which have risen as China has swiftly recovered from Covid-19 lockdown periods earlier in the year and seen a sharp uptick in manufacturing rates in just the past few months.

Shanghai Futures Exchange (SHFE) aluminium prices reached a nine-year high around 17,000 yuan/t ($2,598/t) at the start of December, from below Yn15,000/t a month earlier.

The rise in aluminium production is justified by the demand that is driving those prices, but China has also been importing metals in strong volumes this year as other markets have recovered far more slowly from lockdown restrictions.

China imported 1.74mn t of primary aluminium and aluminium alloy in January-October, exceeding the total imports of 2009, when China last turned net importer of aluminium.

London Metal Exchange (LME) three-month aluminium prices rose above $2,000/t for the first time in more than two years in November, peaking at $2,062/t at the start of December from below $1,840/t a month previously.

Prices at that level depend on the recent buying from China, but swiftly rising domestic production in China could see that import appetite diminish and China return to being a net exporter of aluminium.

Western producers will hope that any negative effect on prices will be allayed by a return to activity in Europe and other markets as a result of widespread Covid-19 vaccinations, after the vaccine roll-outs started in a number of countries over the past week.

By Jethro Wookey