Power Cuts, Low Rainfall Impact Chinese Aluminum Supply, Drive Import Surge

China has significantly increased its reliance on aluminum imports this year due to lower domestic aluminum supply. According to reports, the move is part of a strategic measure to partially offset the below-average output in domestic production. Indeed, new customs data reveals that China saw a notable 10.7% increase in aluminum imports during the first half of 2023 compared to the previous year.

This surge in imports amounted to 1.2 million metric tons of unwrought aluminum and related products. Among the most notable were primary metal and alloyed aluminum. According to a report by Reuters, imports reached 211,235 metric tons in June. This marks a substantial 12.8% rise from the corresponding month in 2022.

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Aluminum Supply Difficulties Began Post-COVID

As MetalMiner previously reported, China has been reducing its annual aluminum output due to various factors. This directly resulted in the country’s inability to match demand since the start of the post-COVID period. One example is China’s Yunnan region, which accounts for approximately 12% of the country’s total aluminum supply. Yunnan has been facing power cuts since September of the previous year due to low rainfall affecting the region’s power output. In turn, these power disruptions compelled electrolytic aluminum producers in Yunnan to reduce their power usage, leading to a slowdown in output growth.

That said, China’s primary aluminum production reached 10.1 million tons in the first three months of this year. This marks a 5.9% increase from the same period last year. However, it is still insufficient to meet demand.

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Bauxite, Russian Aluminum Imports Increase

Additionally, there has been substantial growth in the import of bauxite, a critical raw material for aluminum production. For instance, in June, bauxite imports increased by 22.9%. Meanwhile, in the first half of the year, imports rose by 10.6%.

As the leading global consumer of metals, analysts expect China to implement additional stimulus measures to bolster its economy. If this happens, it could result in increased demand for industrial metals and aluminum supply.

Moreover, in the year following the invasion of Ukraine, China has significantly increased its imports of Russian aluminum, nearly doubling the previous volume. This surge in imports comes as some Western buyers avoid metal sourced from the major commodity supplier.

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