According to Sina Finance, recent declines in alumina prices have pushed some enterprises into minor losses. Coupled with production slowdowns during the heating season, alumina producers have reduced operating rates and output. Meanwhile, strengthening raw material cost support has provided short-term backing for alumina prices, slowing the pace of spot price declines.

Since November, domestic alumina spot prices have continued their downward trend. As of November 14, the average daily spot price stood at RMB2,832.95 per ton, down RMB 38.45 per ton (1.34%) from October 31. This decline stems from multiple factors including ample spot supply, falling raw material costs, and limited demand growth. However, recent price trends indicate a noticeable slowdown in the decline. As some enterprises implement modest production cuts, the pressure from oversupply in the spot market has eased somewhat, and downstream buyers have shown increased purchasing enthusiasm.

Some Enterprises Reduce Operations, Leading to Temporary Output Decline

As of the week ending November 14, 2025, total installed alumina capacity stood at 114.65 million tons, with operational capacity at 86.21 million tons. The capacity utilization rate was 75.19%, down 0.40 percentage points from the previous period. In Shanxi Province, temporary maintenance at individual plants brought the regional capacity utilization rate to 68.51%, down 1.72 percentage points from the previous period. Minor reductions in operating loads at some plants led to temporary output declines, providing some support to spot prices. However, current spot market fundamentals indicate continued ample supply, with market participants maintaining a cautious stance.

New Capacity Stable Output, Increased Supply Within the Year, Spot Prices Under Pressure

Driven by rapid aluminum industry growth and rising alumina demand, coupled with expanded profit margins for alumina producers in 2024, companies have intensified expansion efforts. China's new alumina capacity in 2025 has seen significant growth and is now operating stably. By the end of October, China's completed alumina capacity reached 114.65 million tons, with 13.8 million tons added within the year. From January to October 2025, China's cumulative alumina output reached approximately 75.36 million tons, marking a year-on-year increase of 4.78 million tons or 6.77%, indicating a notable supply expansion.

The alumina market faces oversupply in spot markets due to two factors: stable output from new capacity added within the year and delays in some new projects until 2026. Preliminary estimates indicate 9.2 million tons of new capacity will come online in the first half of 2026, further intensifying the pressure of oversupply. These combined factors have weighed on spot alumina prices, driving them lower.

Downstream Inquiries Increase, but Actual Demand Growth Remains Limited

Approximately 95% of China's alumina output is used in primary aluminum production, positioning it as an upstream raw material in the aluminum industry. According to Fubao Information data monitoring, as of the week ending November 14, 2025, the downstream electrolytic aluminum industry operated at high capacity utilization, maintaining a capacity utilization rate above 96%. Long-term contract demand for alumina remained relatively stable. Replacement projects and new capacity in regions like Xinjiang and Inner Mongolia continued to advance. However, constrained by electrolytic aluminum capacity caps, actual demand growth remains limited. As alumina market prices fell below the high-cost thresholds of some enterprises, purchasing intentions among downstream electrolytic aluminum plants and end-users rebounded. Reports indicate queues of transport trucks waiting to load cargo outside some manufacturers. China's downstream alumina consumption in October reached approximately 7.4267 million tons, up 233,600 tons (3.25%) from September's 7.1931 million tons. Daily consumption averaged around 239,600 tons in October, down 200 tons from September, indicating minimal fluctuation.

Stronger Cost Support Following Ore Price Decline

China relies on imports for approximately 70% of the bauxite required for alumina production, primarily sourced from Guinea and Australia. Guinea's bauxite prices have fallen from $115/ton at the beginning of the year to $70-72/ton, significantly easing production costs for enterprises. However, as spot prices decline, profit margins have narrowed accordingly, with some high-cost enterprises already facing minor losses of 70-80 RMB/ton. Current alumina prices have fallen to fluctuate near the cost line. Further downside potential for ore prices appears limited, suggesting cost support for prices may strengthen going forward.

Overall, while some alumina producers are currently operating at slight losses, production slowdowns by certain enterprises during the heating season provide some support to spot prices. However, no widespread maintenance shutdowns have occurred within the industry. Supply remains ample. Continued attention should be paid to production operations during the heating season and winter stockpiling activities at aluminum smelters in Northwest China. Considering factors such as strengthening raw material cost support, the downside potential for alumina spot prices in the latter half of November is expected to be limited, with prices likely fluctuating modestly around the cost line.

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