In April, electrolytic aluminum prices remained at elevated levels, exhibiting wide fluctuations, with overseas market performance outpacing that of the domestic market. During the first ten days of April, persistent geopolitical tensions in the Middle East and ongoing disruptions to overseas supply continued to bolster aluminum prices, driving an upward trend. In the latter half of the month, as the geopolitical landscape involving the U.S., Israel, and Iran shifted, the supportive impact of overseas supply factors began to wane. Furthermore, weighed down by high oil prices, expectations of global economic stagflation intensified; consequently, domestic aluminum prices trended lower amidst volatility, while overseas prices remained resilient.
Throughout April, alumina futures prices followed a trajectory of initial decline followed by a rebound, while spot prices generally trended lower. In early April, a concentrated release of new domestic alumina production capacity intensified market supply pressures, causing futures prices to gradually drift toward previous lows. However, in late April, cost-side support within the industry strengthened. Amidst production cuts and shutdowns at several domestic alumina plants due to equipment malfunctions—coupled with market disruptions stemming from news regarding Guinea's implementation of a bauxite "quota system"—alumina futures halted their decline and began to recover.
Overseas Electrolytic Aluminum Supply Faces Decline
In March, China's domestic bauxite output reached 5.2 million tons—a month-on-month increase of 9.32% and a slight year-on-year decline of 0.51%—indicating that the overall supply of domestically produced bauxite remained ample. During the same month, China imported 21.78 million tons of bauxite, representing a month-on-month surge of 28.47% and a year-on-year increase of 32.27%. In the first quarter of this year, bauxite from Guinea accounted for over 80% of China's total bauxite imports. Driven by a confluence of factors—including the commissioning of new projects, the resumption of operations at previously idled sites, and production expansions at existing facilities—Guinea's monthly bauxite export volume has continued its upward trajectory, thereby further increasing the concentration of China's bauxite import sources.
In March, China's alumina output reached 7.3 million tons, marking a month-on-month increase of 10.56% but a year-on-year decline of 3.33%. In Guangxi, capacity from newly constructed alumina projects gradually came online, while numerous enterprises in regions such as Guizhou and Guangxi simultaneously carried out routine maintenance; in the Shanxi region, the overall operating rate experienced a slight dip as some enterprises continued to advance production line upgrades and renovations. During the first half of April, the concentrated release of new capacity—particularly in regions like Guangxi—drove a steady rebound in alumina production; however, in late April, production at several domestic alumina enterprises was curtailed or halted due to equipment malfunctions, causing the country's weekly alumina output to edge downward.
In March, China's alumina exports totaled 209,400 tons—a month-on-month increase of 43.03% but a year-on-year decline of 29.42%. Imports reached 338,300 tons, representing a month-on-month increase of 86.91% and a substantial year-on-year surge of 2,921%; consequently, the country recorded a net import of 128,900 tons of alumina for the month.
Regarding inventory, as of April 24, total domestic alumina stocks reached 5.915 million tons. While the inventory continued to accumulate, the pace of accumulation slowed somewhat, with the increase primarily driven by goods in transit. Meanwhile, futures inventory hovered within the 460,000 to 470,000-ton range.
In March, China's electrolytic aluminum output stood at 3.83 million tons, representing a year-on-year increase of 3.15% and a month-on-month increase of 10.73%. Driven by the concentrated resumption of work and production among downstream enterprises following the Lunar New Year holiday, the proportion of molten aluminum also rebounded; it rose by approximately 9.3 percentage points from the previous period, reaching 73.7%. In April, as the traditional peak consumption season continues to unfold, downstream demand for primary aluminum is expected to gradually recover, and the proportion of molten aluminum is projected to edge upward.3. Import volumes remain at high levels, alleviating the domestic supply-demand gap
Regarding overseas markets, electrolytic aluminum production abroad totaled 2.57 million tons in March—a year-on-year increase of 0.2%—while the average daily output declined by 2.7% month-on-month. In April, aluminum smelters in Mount Holly (USA) and Grundartangi (Iceland) were scheduled to resume production; meanwhile, restart efforts at the San Ciprián smelter in Spain continued to advance, and the operational capacity of newly constructed electrolytic aluminum projects in Indonesia and Angola was also expected to continue expanding. However, the lingering effects of the large-scale production cuts and shutdowns implemented at smelters in the Middle East and Mozambique during March gradually became apparent; consequently, overseas electrolytic aluminum production in April recorded a marked decline on both a year-on-year and month-on-month basis.
In terms of imports and exports, domestic imports of primary aluminum amounted to 255,000 tons in March, while exports totaled 15,000 tons, resulting in a net import volume of 240,000 tons for the month.
Terminal consumption has shown signs of recovery
In March, operating rates among domestic downstream aluminum processing enterprises generally rebounded rapidly, highlighting the characteristics of the industry's traditional peak season. In April, operating performance within the aluminum processing sector showed some divergence; while overall operating rates remained resilient—bolstered by a recovery in export price spreads and support from domestic demand segments such as energy storage and packaging—the industry's aggregate operating level faced downward pressure. This pressure stemmed from weak demand for construction profiles, as well as drag effects resulting from anticipated production cuts in the photovoltaic sector and increased substitution by recycled aluminum.
Regarding the real estate sector, from January to March, the floor area of new housing starts nationwide totaled 103.73 million square meters, a year-on-year decrease of 20.3%; meanwhile, the floor area of completed housing units amounted to 97.89 million square meters, down 25.0% year-on-year.
In the automotive sector, from January to March, domestic automobile production and sales reached 7.039 million and 7.048 million units, respectively—representing year-on-year declines of 6.9% and 5.6%. Within this segment, the production and sales of new energy vehicles (NEVs) totaled 2.965 million and 2.96 million units, respectively, marking year-on-year decreases of 6.8% and 3.7%; consequently, the share of NEV sales within total automobile sales rose to 42%.
Regarding investment in the power sector, during the January-to-February period, nationwide investment completed in power grid construction projects amounted to 83.8 billion yuan—a year-on-year increase of 79.84%. Meanwhile, investment completed in power generation projects reached 104.4 billion yuan, up 32.35% year-on-year.
As for aluminum exports, from January to March, China's total exports of aluminum products reached 1.3529 million tons, representing a year-on-year increase of 4.88%.
Regarding inventories, as of April 23, LME aluminum stocks declined to 376,000 tonnes, standing at a relatively low level historically. Domestic social aluminum inventories continued their upward trend, rising to 1.465 million tonnes as of April 27. Total global aluminum inventories—comprising stocks held at the LME, COMEX, domestic social warehouses, and bonded zones—amounted to 1.91 million tonnes, an increase of 695,000 tonnes compared to the same period last year.
Macroeconomic sentiment continues to exert an influence
Since the escalation of geopolitical tensions involving the U.S., Israel, and Iran on February 28, international crude oil prices have repeatedly breached the $100-per-barrel mark. Rising global expectations of stagflation continue to exert downward pressure on aluminum prices. Recently, the second round of U.S.-Iran negotiations has reached an impasse; with geopolitical uncertainties persisting in the Middle East and shipping through the Strait of Hormuz facing restrictions, disruptions to the supply of aluminum raw materials and finished products in the region are expected to continue.
Looking ahead to May: regarding bauxite, domestic supplies are generally ample; however, prices for imported bauxite are poised to strengthen, bolstered by changes in Guinea's export policies and rising maritime freight rates.
In the alumina market, the commissioning of new production capacity is proceeding concurrently with production cuts and maintenance activities by enterprises, resulting in significant pressure on market supply. Meanwhile, as the industry enters a loss-making zone, the inclination among enterprises to reduce or halt production continues to intensify. Policies related to bauxite from Guinea are expected to provide a temporary boost to alumina prices; however, if the actual implementation of these policies falls short of expectations, it will be difficult to reverse the industry's structural oversupply. Consequently, alumina futures prices in May are projected to remain at low levels, exhibiting wide-ranging volatility.
In the electrolytic aluminum market, the rollout of domestic production capacity is proceeding steadily, resulting in a stable yet gradually increasing supply. Conversely, overseas supply is trending toward contraction, suggesting that the global supply deficit for electrolytic aluminum may widen further. Although electrolytic aluminum prices are subject to volatility driven by broader macroeconomic sentiment, they remain fundamentally biased toward the upside—being more prone to rise than to fall—bolstered by the underlying logic of a global supply shortage.
Overall, particular attention should be paid to the following three risk factors: first, geopolitical developments in the Middle East that evolve beyond current expectations; second, shifts in the pace of production cuts and restarts among domestic alumina producers; and third, changes in overseas electrolytic aluminum production capacity, as well as trends in production and sales activities.
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