LONDON (Reuters) – Global aluminium production growth ground to a standstill in the first half of this year. The world’s smelters produced 31.76 million tonnes of metal in January-June, a 1 percent decline on the first half of 2017, according to the International Aluminium Institute (IAI).
Expressed in annualised terms, global output in June was almost two million tonnes lower than a year earlier. Production outside of China has been creeping higher since January but the growth rate is being constrained by an unusually high level of disruption with multiple plants operating at reduced rates.
National run rates in China, the world’s largest single producer, have also been recovering from last year’s combination of “illegal” capacity closures and winter heating season restrictions but are still down on year-earlier levels.
This stuttering production profile fits in with expectations that this year will be one of global supply shortfall and a resulting drawdown in inventories. Production in North America, Latin America, Western Europe and Africa fell in the first half of 2018 due to smelter problems.
North American production should in theory be rising with Alcoa reactivating part of its Warrick smelter in Indiana and Century Aluminum committed to doing the same at its Hawesville smelter in Kentucky.
In both cases, however, it’s been a case of two steps forward, one step back.