According to the National Bureau of Statistics, China produced a total of 2.69 million tons of aluminum in July, down from 2.93 million tons in June. China is the world's largest producer of aluminum.
July production fell by 0.3% year-on-year.
The overall output of non-ferrous metals in July was 4.55 million tons, which was flat compared with the same period of last year, but was 6.2% lower than the 4.85 million tons in June.
The decline in aluminum production in China is due to major reforms in the supply side of the industry, pushing Shanghai aluminum futures to a five-year high near last week.
Shandong Province, the largest aluminum producer in China, is required to shut down 3.2 million tons of “illegal” production capacity at the end of July, and the number of shutdowns is higher than expected.
The July data showed a significant reduction in China's aluminum production, but analysts expressed doubts about the accuracy of the Bureau's data.
CLSA analyst Daniel Meng said, “The recent tightening of supply will undoubtedly have an impact on production data, but it may not be so fast or so much.”
Statistics Bureau data also showed that aluminum production in the first seven months of this year still increased by 7.5%.
The US Commerce Department issued a statement last week saying that it initially ruled that China's aluminum foil products exported to the United States received subsidies ranging from 16.56% to 80.97%. According to the US procedures, the US Department of Commerce and the International Trade Commission will make a final ruling at the end of this year.
Export data released last week showed that China's aluminum exports in July fell by 4.3% to 440,000 tons, but still up 12.8% from the same period last year.