The latest figures from the International Aluminium Institute (IAI) showed a collective annualised run-rate outside of China of 25.1 million tonnes in April. That was the lowest level since August last year, reflecting the ramp-down of capacity in the U.S., where local producer Alcoa has shuttered its Warrick and Wenatchee smelters.
The world outside of China is widely believed to be in supply deficit.
China, on the other hand, is widely believed to be still in production surplus, the resulting imbalance generating continued flows of semi-manufactured products into international markets.
There were signs that Chinese smelters were also curtailing capacity at the end of last year but with Shanghai aluminium prices staging an impressive rally, the fear is that production discipline will be lost and that Chinese exports will increase again to fill any supply gap in the rest of the world.
So is Chinese production going up, going down or is it largely unchanged?
It should be an easy question to answer but unfortunately it's not because of the volatility in the recent figures supplied to the IAI by China's Nonferrous Metals Industry Association (CNIA).
If the figures are to be believed, Chinese output slumped by an annualised 6.6 million tonnes in the December-February period only to surge back by 5.2 million tonnes in March and April.
Except anyone who knows how an aluminium smelter works will tell you the figures don't make any sense.
Looking for example at the apparent 4.8-million tonne increase between run-rates in February and March, Paul Adkins of consultancy AZ China noted wryly that the month-on-month jump was equivalent to "10 smelters running at full speed on March 1 after being idle on February 29".
Volatility is nothing new to these Chinese aluminium production figures, particularly around the turn of the year, both calendar and lunar, but this year's variance is unprecedented.
Perhaps the best way to penetrate the statistical smoke is to look at annualised production over a longer period.
On this basis April's run rate was 31.3 million tonnes, down a net 1.79 million tonnes from September last year.
That would tally with the anecdotal evidence that capacity was indeed curtailed as local prices fell below 10,000 yuan per tonne in November, lower even than during the worst of the Global Financial Crisis in 2008-2009.
The figures for March and April would also suggest, however, that restarts may already be happening, albeit not on a scale implied by that month-on-month explosion in output in March.
And Chinese smelters right now have every incentive to lift output rates, given the strength of the rally in Shanghai prices.
The strength of the rally since November's trough has dispelled all the earlier talk of coordinated production cutbacks in return for government help in setting up an aluminium stockpile.
There is no hard evidence that the proposed scheme ever got off the ground, although it may have played a part in deterring the short-sellers who were swarming over the Shanghai market at the end of last year.
But while other over-heating commodities such as steel rebar and iron ore have collapsed in the wake of the regulatory intervention, Shanghai aluminium has recouped most of its immediate losses and is trending upwards again.
This does in part reflect an improving demand picture in China, AZ China's Adkins for example noting that "several sectors are showing good growth signals, including high voltage cables, automobiles, white goods and consumer durables".
What is not in doubt is the outperformance of the Shanghai aluminium contract relative to the London market this year.
The Shanghai price has risen by 16 percent, while the price of three-month aluminium on the London Metal Exchange (LME) is up by a far more modest 6 percent.
That doesn't bode well for producer discipline since Chinese smelters have in the past responded first and foremost to domestic price signals in terms of capacity utilisation.
It in turn will depend on the underlying supply-demand drivers in the country. Just a shame they are currently so obscured by statistical smoke and market mirrors.http://www.reuters.com/article/china-aluminium-ahome-idUSL5N18K286