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China’s primary aluminium production increased by 3.2% to 3.39 million tonnes in June from a year earlier, thanks to higher global prices.

June production fell slightly by 0.9% from the previous month, when it reached a record 3.42 million tonnes. Aluminium prices rose significantly in the first quarter of this year, driven by supply concerns against the backdrop of soaring international prices and Russia’s invasion of Ukraine.

Higher profits spurred an increase in production in China and the start-up of new capacity, although prices began to weaken in the second quarter as tight closures in Chinese cities to contain the spread of COVID-19 hurt demand.

Increased hydropower production in the southwestern province of Yunnan during the rainy season, which usually runs from late May to October, also boosted aluminium production. Yunnan is home to about 10% of China’s production capacity of this metal.

Chinese producers are on track to increase their output due to relaxed electricity controls, while demand has weakened due to mixed factors including the pandemic.

Many suppliers are pinning their hopes on foreign markets with high exports weighing on global prices. China exported 607,443 tonnes of raw aluminium and aluminium products in June, down 10.2 per cent from last month’s record 767,605 tonnes, but up 71.6 per cent year-on-year.

In the first six months of the year, China produced 19.68 million tonnes of aluminium, up 0.7% from the same period last year.