2025, as the final year of the "14th Five-Year Plan", witnessed a fundamental turning point in the development of China's alumina industry, shifting from scale expansion to quality and efficiency improvement. In 2025, the market was affected by four factors: concentrated capacity release, differentiated downstream demand, policy adjustments, and changes in the raw material pattern, showing the characteristics of intensified oversupply, sharp price fluctuations, pressure on industry profits, and a reversal of the trade pattern.
Main performance of the market in 2025:
A surge in production capacity leads to oversupply, and policies force transformation
On the supply side, the inertia of alumina production capacity expansion continues. Data from the China Non-Ferrous Metals Industry Association shows that in 2025, China's total alumina production capacity reached 108 million tons, of which the actual newly commissioned capacity was 8.3 million tons, mainly put into operation in the first half of the year. In 2025, China's total alumina output reached 94.448 million tons, a year-on-year increase of 9.4%. Among them, the output of metallurgical grade was 89.28 million tons, and the output of chemical grade was 5.168 million tons, both hitting record highs.
The regional pattern shows a trend of "traditional production areas under pressure and emerging production areas rising". The North China region (Shanxi, Henan, and Shandong) accounts for 52.3% of the total production capacity, but the utilization rate is generally lower than 70%; emerging regions such as Guangxi and Inner Mongolia, relying on their resource and energy advantages, have a utilization rate of 80%.
The import and export pattern has undergone a fundamental transformation. According to data from the General Administration of Customs, in 2025, the cumulative import of alumina was 1.1981 million tons, a year-on-year decrease of 15.62%; the cumulative export was 2.5492 million tons, a year-on-year surge of 42.76%; the annual net export reached 1.3511 million tons, a year-on-year increase of 269.48%. Among them, exports to Russia amounted to 2.0204 million tons, which was the main source of increment. The sources of imports showed a diversified trend: imports from Australia decreased by 44.60% year-on-year, while imports from Indonesia surged by 109.28% year-on-year.
On the demand side, demand is highly dependent on the electrolytic aluminum industry. In 2025, constrained by the "ceiling" of production capacity, the output of electrolytic aluminum reached 43.89 million tons, with a year-on-year growth rate of only 1.8%. This formed a huge gap with the nearly 10% output growth rate of alumina, becoming the core of the supply-demand imbalance. Although the average profit of the electrolytic aluminum industry reached 3,687 RMB per ton, a new high in recent years, the profit distribution in the industrial chain is seriously uneven.
There is a significant differentiation in the demand structure. The downturn in the real estate market has dragged down the consumption of aluminum for construction profiles and metallurgical-grade alumina; while strategic emerging industries such as new energy vehicles and photovoltaics have driven the consumption of high-end aluminum, resulting in marginal improvements. Chemical-grade alumina has expanded its applications in high-end manufacturing, new energy and other fields, becoming an important supplement to demand.
In terms of price and cost, the downward shift of the price center has caused widespread pressure on the industry. In 2025, the price of alumina showed a trend of "high-level plunge - mid-term rebound - late-stage fluctuation", with the center moving down significantly. At the beginning of 2025, the price of alumina was about 5,540 RMB to 5,700 RMB per ton. It continued to fall to 2,950 RMB per ton in the first half of the year, breaking through the cost line, leading to large-scale losses and active production cuts in the industry. In July 2025, driven by tight spot supply, the price of alumina rebounded by more than 27% in the short term, then came under pressure again. In the second half of the year, it mainly fluctuated around 3,000 RMB per ton, closing at 2,778 RMB per ton at the end of the year.
In terms of costs, in 2025, the average import price of bauxite in China was about $79.26 per ton. By the end of the year, the CIF price of Guinean bauxite had dropped to around $71 per ton. Although the price of raw materials declined, the price of alumina fell even faster. By the end of 2025, the full cost of the industry had dropped below 2,900 RMB per ton, with the cash cost being approximately 2,730 RMB per ton. Most enterprises were in a state of meager profits or losses.
In terms of policies, strict control over new production capacity is implemented to guide the high-quality development of the industry. In March 2025, 10 departments including the Ministry of Industry and Information Technology jointly issued the "Implementation Plan for the High-Quality Development of the Aluminum Industry (2025 - 2027)", which clearly states that no new production capacity will be added in key areas for air pollution prevention and control, and raises the thresholds for energy efficiency and environmental protection to guide the industry towards quality and efficiency. Driven by policies, enterprises such as Jiaozuo Wanfang and Hongchuang Holdings have announced restructuring plans, intending to integrate upstream production capacity; the Guinea alumina projects of State Power Investment Corporation and Winning Alliance have been advanced one after another, with the industrial chain extending to the resource end. In September 2025, 8 departments including the Ministry of Industry and Information Technology jointly issued the "Work Plan for Stabilizing Growth in the Non-Ferrous Metals Industry (2025 - 2026)", which further clarified the direction for the high-quality development of the non-ferrous metals industry.
The Core Contradictions in the 2025 Market and Typical Cases
In 2025, the core contradiction in the alumina market lies in the serious imbalance between supply and demand, with both structural and regional contradictions coexisting.
The core contradiction in the market is the severe imbalance between the rapidly increasing supply and the rigid and limited demand. Assessments show that the domestic alumina market has a surplus of approximately 2 million tons. The pressure from the surplus has pushed up inventories. In 2025, the total social inventory of alumina increased from 3.02 million tons at the beginning of the year to 4.67 million tons at the end of the year.
The specific manifestations of the contradictions are as follows: first, the structural imbalance of "oversupply of low-end products and shortage of high-end products"; second, the regional contradictions, where traditional production areas have low utilization rates due to environmental protection and raw material issues, while emerging production areas maintain high utilization rates by virtue of cost advantages.
Typical cases are manifested in reducing production to maintain prices and transforming to high-end products. The first is reducing production to maintain prices. In the first half of 2025, after the price of alumina plummeted, enterprises in Shanxi, Henan and other regions cumulatively reduced their production capacity by 6.9 million tons, which alleviated the supply pressure in the short term and promoted a price rebound, but did not fundamentally change the pattern of oversupply. The second is transforming to high-end products. Some enterprises are actively transforming to high-end products. For example, Chalco Shandong has added 5,000 tons/year of high-purity alumina production capacity, focusing on the new energy battery field; Rio Tinto announced plans to cut 40% of the production capacity of its Australian factory starting from October 2026 to focus on high-end products, which reflects the industry trend.
2026 Market Outlook:
The surplus pattern continues, and transformation accelerates
On the supply side, there is still an increase in production capacity and the impact of imports is intensifying. It is predicted that in 2026, the planned new domestic alumina production capacity will be 13 million tons, with the actual commissioning being approximately 9 million to 10.6 million tons, concentrated in the first half of the year, with the core region being Guangxi. The new production capacity has the characteristics of being coastal and port-adjacent, green and low-carbon, and has low costs.
Global supply pressures are increasing simultaneously. It is expected that in 2026, the global new production capacity will be approximately 17.4 million tons, with Indonesia becoming the core source of increments. It is estimated that Indonesia will export 5 million tons to China, which will form a direct price impact due to its cost advantage.
The raw material side remains loose. In 2026, the global supply growth of bauxite will be concentrated in Guinea, with domestic import dependence remaining above 69%. The unit price of Guinean bauxite mines is expected to decline month-on-month, supporting the maintenance of low production costs.
On the demand side, the overall growth rate is limited, but there are prominent structural bright spots. In 2026, domestic electrolytic aluminum production capacity will still be constrained by the "ceiling". The output is expected to be 45.44 million tons, a year-on-year increase of 1.5%, corresponding to an alumina demand growth rate of less than 2%, and the growth of core demand shows rigidity.
Structural demand is the main highlight: new energy vehicles (with expected production exceeding 15 million units), photovoltaic (with expected installed capacity of 120GW), etc., continue to make efforts. The demand for chemical-grade alumina is expected to maintain a high growth rate of 8%, becoming a core highlight. In addition, Liaoning Xiangyu Aluminum Industry plans to resume production in March 2026, which will add an annual demand of 400,000 tons.
Price and industry trends: Prices fluctuate at a low level, and integration and upgrading are accelerating. In 2026, it is expected that the oversupply pattern of alumina will continue, with persistent inventory pressure. The annual price is expected to remain fluctuating at a low level, with an operating range roughly between 2,600 RMB and 3,200 RMB per ton, and the center will be slightly lower than that in 2025. The production cost of the industry is expected to remain between 2,700 RMB and 2,900 RMB per ton, with overall meager profits or losses, and high-cost production capacity will gradually exit.
Policies will continue to implement high-quality development plans, strictly control new production capacity, and encourage mergers and reorganizations. It is expected that more downstream enterprises will integrate upstream to enhance the industrial scale and integration level. At the same time, technologies such as low-carbon smelting and digital transformation will be promoted at an accelerated pace. For example, the 1 million-ton energy-saving technological transformation project of Chalco Shanxi New Materials is scheduled to be put into operation in April 2026, promoting the green and efficient development of the industry.
Overall, in 2025, under the influence of concentrated capacity release, weak demand growth, and policy-guided transformation in China's alumina market, the situation of intensified oversupply, price fluctuations, and profit pressure emerged. The realization of net exports throughout the year marked that the industry has officially entered a transition period of high-quality development. Looking ahead to 2026, the market's oversupply pattern will continue, with supply pressure remaining unabated. The demand side will have prominent structural bright spots but limited overall support, and prices are expected to fluctuate at a low level. In the future, the alumina industry will accelerate the elimination of backward production capacity, promote mergers and reorganizations, and evolve towards the core directions of high-end, green, and integrated development, gradually seeking a dynamic balance between supply and demand by increasing concentration.
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