North American April aluminum output rises 4.7% on year: IAI data

    Primary aluminum output in North America reached an estimated 333,000 mt in April, up from 318,000 mt in April 2019. April's production slipped 2.6% compared with March numbers, but daily output remained flat month over month at 11,000 mt.

    January-April aluminum production in the region increased 4.3% to 1.3 million mt compared with the same period a year ago, according to the IAI data.

    Analysts with Commerzbank Wednesday said global aluminum production was already expected to remain high through April despite a likely 9% decline in world demand and a predicted surplus of 5.25 million mt in 2020, according to a research note.

    Alcoa CEO Roy Harvey said Thursday the aluminum industry would need a coordinated effort to cut production if low demand conditions persist.

    "This industry is right now producing more aluminum than it needs," Harvey said during a virtual presentation at the Bank of America Securities Global Metals, Mining & Steel Conference. "I think there needs to be a clear call for action that really demands people think about the competitiveness of their smelters and ensures that we are smartly acting as an industry through this cycle."

    However, Harvey said the decision to curtail aluminum capacity is heavily challenged by the high costs associated with potline shutdowns at smelters.

    Alcoa announced in April that it would idle the remaining 230,000 mt of capacity at its Intalco aluminum smelter in Ferndale, Washington, at the end of July as part of its company-wide restructuring plan. The smelter has a nameplate annual capacity of 279,000 mt, though the company had previously curtailed about 49,000 mt of that capacity.

    The Aluminum Association said the annual rate of US primary aluminum production, based on 2020 output through April, was estimated at 1.1 million mt, slightly lower than the 1.2 million mt rate reported in April 2019, according to a recent report.

    Separate data from the Aluminum Association of Canada indicated the estimated annual rate of Canadian primary aluminum production to be 3.1 million mt, up from 2.9 million mt in the same period last year.

    Global production steady in April

    IAI data showed a slight increase in April global aluminum production to 5.26 million mt from 5.24 million mt in the year-ago period.

    Estimated April aluminum production in China, the world's leading producer of the metal, followed the global trend with a marginal 0.7% year-over-year increase to 2.98 million mt.

    Countries of the Gulf Cooperation Council, the world's second-leading aluminum-producing region, produced an estimated 483,000 mt of aluminum in April, up 6.9% year over year but down 3.2% from March.

    Roman Andryushin, Rusal's director of marketing and sales, told S&P Global Platts last week that smelters are mostly maintaining normal production levels to preserve jobs, though an estimated 25% of global smelting operations are currently operating at a loss.

    "A substantial share of loss-making producers is located in the most developed countries, where you may rely on state support or market defense measures," Andryushin said in an interview.

    Andryushin said the aluminum industry cannot sustain such market imbalance long-term and must work to address surplus capacities, which Rusal estimates could reach 2 million-4 million mt/year.

    Rusal is the world's third-largest primary aluminum producer.