Like steel, global aluminum production slips – Steel, aluminum, copper, stainless steel, rare earths, metals prices, forecast
Just as global steel producers have slowed in recent months, global aluminum production has also fallen, and aluminum prices recently hit a 13-year high.
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Global aluminum production falls
Olegs / Adobe Stock
Amid skyrocketing aluminum prices, global aluminum production fell in August, says International Aluminum Institute reported this month.
Global production totaled about 5.70 million metric tonnes, up from 5.73 million metric tonnes the previous month.
However, production increased from the 5.52 million metric tonnes estimated in August 2020.
China, the world’s largest producer of aluminum, produced about 3.30 million metric tonnes in August. This marked a decrease from 3.33 million metric tonnes.
At the same time, production in the Gulf Cooperation Council increased from 496,000 tonnes to 504,000 tonnes in August.
Asian production excluding China remained stable at 384,000 tonnes.
North American production fell 5.4%, from 333,000 metric tonnes to 315,000 metric tonnes.
Supply reduction
As MetalMiner’s Stuart Burns explained earlier this month, rising aluminum prices probably have more to do with supply than the equation (as opposed to demand).
Much of the compression, unsurprisingly, comes from developments in China, the world’s largest producer of aluminum. A coal shortage has impacted China’s vast metal production sector, including aluminum.
“In a context of a coal shortage, the tightening of emission standards has forced some provinces to ration coal-fired electricity production to meet China’s commitment to reduce energy intensity during this decade,” Burns wrote. “According to Reuters, production restrictions have hit the steel, aluminum and cement industries particularly hard. About 7% of aluminum production capacity has been suspended.
In addition, the recent coup in Guinea has had an impact on the aluminum supply chain. Guinea has the world’s largest reserves of bauxite, which is used in the aluminum production process. According to the South China Morning Post, China imported more than 47% of its bauxite from Guinea last year.
Aluminum prices rise
The LME’s three-month aluminum closed Wednesday at $ 2,930 per metric tonne, up 8.68% month over month.
Meanwhile, US Midwest Premium three-month futures reached $ 0.335 a pound, up 6.01% month-over-month.
China’s primary cash aluminum hit $ 3,532 per metric ton, up 8.72% month-over-month.
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