Guinea—the world's largest producer of bauxite—has announced plans to implement new bauxite export control policies in June. The core objectives of these measures are to limit export volumes, drive up ore prices, and promote domestic downstream processing. This move poses a direct challenge to the security of China's aluminum industry chain and supply network. As the largest buyer of Guinean bauxite, China is highly dependent on these imports; consequently, expectations of tightening bauxite supplies are intensifying, driving up production costs for alumina, electrolytic aluminum, and aluminum products. On May 26, the domestic spot aluminum market remained volatile but trended upward. The benchmark price tracked by SunSirs held steady or rose slightly; while short-term gains are limited by current inventory levels and demand constraints, strong cost-side support in the medium to long term is gradually solidifying an upward trend in aluminum prices.

I. Guinea’s Export Controls Strike at the Lifeline of China’s Aluminum Industry Chain

Guinea accounts for over one-third of global bauxite production. In 2025, its export volume reached 183 million tons—a year-on-year increase of 25%—with 74% of these exports destined for China. China's external dependency for bauxite exceeds 70%; in 2025, the country imported 158 million tons, with Guinea accounting for 75.3% of the total and Australia for 17.6%. Furthermore, 50% to 60% of China's domestic alumina production capacity relies on Guinean ore sources. The core of the new controls involves the imposition of export quotas and tariff hikes. Market forecasts suggest that in 2026, Guinea's total export volume could drop to 150 million tons—a reduction of approximately 25 million tons in exports to China—thereby directly creating a supply deficit in the Chinese bauxite market.

The impact on the industry chain is expected to manifest through a ripple effect: tightening bauxite supplies will drive up offshore prices—FOB prices have already rebounded from recent lows to the range of $45–$50 per ton. Alumina production costs will rise in tandem; calculations indicate that for every $10 per ton increase in ore prices, alumina production costs rise by approximately 80 RMB per ton. Consequently, costs for electrolytic aluminum and downstream aluminum products will also trend upward, placing profit margins for downstream processing enterprises under pressure. As a result, some small-to-medium-sized production facilities may be forced to cut output due to mounting cost pressures. In the short term, domestic alumina refineries can still rely on port inventories and long-term supply contracts for bauxite to serve as a buffer; however, starting in June, a tightening in spot supply is expected to gradually become apparent, while cost-side support continues to strengthen.

II. May 26 Aluminum Spot Market Performance: Stable with an Upward Bias; Upstream and Downstream Prices Fluctuate in Tandem

On May 26, the SunSirs benchmark price for aluminum stood at 24,280 RMB/ton—an increase of 70 RMB/ton (0.29%) compared to May 21—reflecting a general trend of volatile recovery throughout the month. Spot market trading activity was moderate.

Quotes for A00 aluminum ingots were reported at 24,200–24,250 RMB/ton in East China and 24,100–24,180 RMB/ton in South China, marking a slight increase of 10–30 RMB/ton from the previous day.

Prices for upstream and downstream products moved in tandem: The average spot price for alumina was 2,680 RMB/ton, up 20 RMB/ton from yesterday; spot supplies at ports remained tight, and traders demonstrated a strong willingness to hold firm on prices. Spot quotes for bauxite ranged from 72 to 75 USD/ton, remaining consistently firm, driven by expectations regarding policy developments in Guinea. In the aluminum fabrication sector, the average spot price for aluminum profiles was 25,800 RMB/ton, while aluminum sheets and strips traded at 25,500 RMB/ton; downstream processing orders remained stable, with prices fluctuating in sync with aluminum ingots.

III. Supply and Demand Fundamentals: Capacity Capped, Imports High, Inventories Low

1. Capacity and Output: Domestic Ceiling Locked; Overseas Disruptions Intensify

The regulatory "red line" (ceiling) for compliant domestic electrolytic aluminum capacity is set at 45 million tons. As of early May, operating capacity stood at 44.92 million tons—approaching the absolute limit—leaving less than 1% of room for new capacity additions within the current year. From January to April 2026, domestic electrolytic aluminum output totaled 14.2 million tons, representing a year-on-year increase of 1.8%, though the growth rate has slowed. On the international front, geopolitical conflicts in the Middle East have constrained over 3 million tons of production capacity; given the lengthy restart cycles required, the global supply deficit is widening. 2. Import and Export Data: High Bauxite Imports in April; Growth in Aluminum Product Exports

According to customs data, China imported 19.7433 million tons of bauxite in April 2026. Cumulative imports for the January–April period totaled 77.728 million tons, representing a year-on-year increase of 15.1%; of this total, bauxite from Guinea accounted for 16.4231 million tons, or 83% of the volume. Alumina imports in April reached 610,000 tons, a month-on-month increase of 80.3%. Exports of aluminum products totaled 580,000 tons, up 12% year-on-year, indicating robust overseas demand.

3. Inventory Levels: Social Inventories at Lows; Port Inventories Under Pressure

As of May 25, domestic social inventories of aluminum ingots stood at 720,000 tons—down 18% year-on-year—marking a multi-year low. LME aluminum inventories hit a 20-year low of 343,000 tons, with the market maintaining a persistent backwardation structure (spot premium). Bauxite inventories at ports totaled approximately 28 million tons, sufficient to support alumina refinery production for 1.5 months; however, a gradual drawdown of these inventories is anticipated after June, potentially bringing supply-side pressure to the fore.

IV. Core Factors Driving Price Fluctuations: Strong Cost-Side Support, Weak Demand-Side Recovery

1. Bullish Factors

Rising Raw Material Costs: Expectations regarding Guinea's export restrictions continue to simmer; consequently, bauxite and alumina prices remain firm, providing strong support from the cost side.

Low Inventory Levels: Both aluminum ingot and bauxite inventories are at low levels, resulting in tight spot market supply and a strong inclination among traders to hold up prices.

Stable Overseas Demand: Exports of aluminum products continue to grow, with overseas orders providing support for operating rates among aluminum processing enterprises.

Capacity Constraints: The domestic ceiling on electrolytic aluminum production capacity remains strictly enforced, limiting incremental supply and creating a tight supply-demand balance.

2. Bearish Factors

Weak Domestic Demand Recovery: Demand in traditional sectors—such as construction and transportation—is recovering slowly, with order volumes falling short of expectations and thereby capping the upside potential for aluminum prices.

Pressure on Downstream Profits: Aluminum processing enterprises face difficulties in passing on rising costs; consequently, some orders are being fulfilled at a loss, keeping operating rates at low levels.

Macroeconomic Pressure: The broader commodities market is experiencing volatility, and market expectations regarding the pace of economic recovery remain cautious, thereby dampening speculative demand. V. Market Outlook: Short-term Volatility and Consolidation; Medium-to-Long-term Upward Trend Established

Around the time Guinea's export controls are implemented in June, expectations of tightening bauxite supplies may drive a temporary surge in aluminum prices. As the supply deficit widens, the production costs for alumina and electrolytic aluminum continue to rise; coupled with domestic capacity constraints and an expanding global supply-demand gap, the upward trajectory of aluminum prices is clearly established.

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