In a significant development, data from the National Bureau of Statistics (NBS) released this morning indicates that Chinese primary aluminum production reached new records. In November, the monthly output of primary aluminum witnessed a 3.6% year-on-year increase, hitting a remarkable 3.7 million tons. This surge was supported by robust overseas export demand, which has kept the metal output at elevated levels. Cumulatively, over the first 11 months of the year, the output has risen by 4.6% year-on-year to reach 40.2 million tons, as noted by ING’s commodity analysts Ewa Manthey and Warren Patterson.
Regarding premiums, media reports suggest that Japanese aluminum buyers were presented with a premium of US$228 per ton for the first quarter of 2025. This is the highest premium since 2015 and represents a 30% quarter-on-quarter increase from the current quarter’s US$175 per ton. However, it is marginally lower than the initial offers that ranged from US$230 to US$260 per ton. The rise in premiums is attributed to expectations of a tighter supply in Asia following China’s cancellation of a 13% tax rebate on aluminum products effective from 1 December 2024.
In the context of mine supply, Peru’s latest official figures reveal a 1.3% year-on-year decline in the country’s copper output to 237,000 tons in October. It has been reported that cumulative production losses from mines such as Cerro Verde and Quellaveco were major contributors to the overall decline in Peru’s production during that month. Cumulatively, for the first 10 months of the year, production has dropped by 0.7% year-on-year to 2.23 million tons.
Simultaneously, weekly data from the Shanghai Futures Exchange (ShFE) shows a mixed picture for base metal inventories. Aluminum weekly stocks have declined for the seventh consecutive week, dropping by 9,875 tons to reach 214,501 tons as of last Friday. This is the lowest level since 10 May 2024. Copper inventories have also decreased for the eighth week in a row, with a reduction of 13,199 tons (-13.5% week-on-week) to 84,557 tons, the lowest since 2 February 2024. Zinc inventories, too, have declined for the fourth consecutive week, falling by 2,317 tons (-4.4% week-on-week) to 50,666 tons, the lowest since 9 February 2024, by the end of last week.
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