At present, the total production capacity of electrolytic aluminum in South America is 2.39 million tons/year, and a total of six aluminum plants are located in Brazil, Argentina and Venezuela. Driven by the resumption of production in Brazil and Argentina, the production of electrolytic aluminum in South America from January to July 2021 increased by 10% year-on-year to 710,000 tons. At present, the resumption of production in Brazil and Argentina is still continuing, and the output has steadily recovered. South America will become the region with the largest increase in overseas aluminum production this year.

Judging from the power supply situation, Brazil has recovered from last year's drought and power shortage. With the sharp increase in rainfall in the first half of this year, the water level of the reservoir has risen sharply, providing power guarantee for the country's aluminum plants to resume production. Electricity costs for the country's aluminum companies have also dropped significantly after power was restored. It is understood that the electricity cost of the CBA aluminum plant in the first quarter of this year has dropped from a high of 2,385 reais/ton in the third quarter of last year to below 1,400 reais/ton, although it increased to more than 1,700 reais/ton in the second quarter, but Still significantly lower than the level in the third and fourth quarters of last year.

Production resumption progress of some foreign aluminum plants

Albras: The aluminum plant is Hydro's aluminum plant in Brazil, with a built-in production capacity of 460,000 tons per year. In February 2022, the production was reduced by 25% due to power failure, and the contracted annual production capacity was 110,000 tons, which has been restored to full production at the end of July.

CBA: The aluminum plant has a production capacity of 430,000 tons/year, and some of its production capacity was idled during the Brazilian energy crisis in 2014. The company plans to resume production of 30,000 tons in 2022, and the production capacity will be restored to 380,000 tons per year by the end of the year. Restoration of the remaining capacity will require a more complex retrofit, which is expected to be completed in 2025. The enterprise has a complete industrial chain, from upstream self-owned mines with an annual production capacity of 3 million tons, alumina plants of 800,000 tons/year, smelters of 430,000 tons/year, to downstream profiles of 55,000 tons and 165,000 tons tons of sheet and strip foil. In addition, the company also has 21 hydropower plants, which can meet the electricity demand of the entire industrial chain within the enterprise, and the electricity cost advantage is obvious.

Alumar: The Alumar aluminum plant in northeastern Brazil is jointly owned by Alcoa and South32, holding 60% and 40% of the shares respectively. It has three electrolysis series with a production capacity of 447,000 tons per year. It was completely shut down in 2015. In September 2021, Alcoa announced a production resumption plan. It has restarted 50,000 tons of production capacity in the second quarter of 2022, and is expected to resume full production in the first quarter of 2023. In order to ensure the restart of the Alumar aluminum plant, Alcoa has signed a short-term power purchase agreement to provide power to the aluminum plant from 2022 to the end of 2023, and has signed a number of long-term power agreements for the aluminum plant from 2024 to 2038. Provide electricity.

Aluar: Aluar is the only primary aluminum producer in Argentina with a production capacity of 460,000 tons/year. In the early stage, production was reduced due to the impact of the epidemic and weather. At the end of 2021, the company said it had reached an agreement with the country's government on power supply and considered returning to full production. At present, the plant is in the stage of resumption of production, involving a production capacity of about 100,000 tons per year.

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