Chinese Commodity Output Soars, Record Levels Reached for Oil Processing and Aluminum Production
Chinese output of key commodities experienced a significant surge in August, indicating a further recovery of the economy following a challenging period. Both oil processing and aluminum production achieved record levels, showcasing promising signs for the future.
Crude refining witnessed an impressive 20% year-on-year increase, reaching 64.7 million tons. This surge can be attributed to plants resuming operations after scheduled maintenance, as they processed the necessary fuels to meet the demands of a bustling summer of travel.
In the aluminum sector, production climbed by 3.1% to 3.6 million tons. Producers in Yunnan resumed production as hydropower shortages alleviated. Furthermore, smelters are expanding their capacity, which is expected to result in a fourth consecutive annual record in output. However, despite these positive trends, low stockpiles and fragile demand pose potential challenges.
Steel production also demonstrated a growth of 3.2% compared to the previous year, although it experienced a decline on a monthly basis. Steel mills generally maintained their output ahead of an anticipated increase in construction activity during the autumn, as well as adhering to the government’s emissions limits. Factors that stimulated production included a temporary upswing in infrastructure investment, as local governments hurriedly spent their remaining special bond quotas. Capital Economics Ltd. suggests that production is likely to recede in the final months of the year.
Coal production witnessed an increase of 2%, despite potential restrictions due to stricter safety checks following a tragic accident in Shaanxi. Additionally, crude oil and natural gas output experienced growth compared to the previous year.
Overall, the surge in output among these key commodities reflects the positive momentum of the Chinese economy. However, challenges such as limited stockpiles and fragile demand persist. As the year progresses, it remains to be seen how these factors will impact production levels in the final months.
