Operating capacity remains at a high level
Since the end of December 2025, the price of alumina has risen to a higher level. Can this upward trend continue?
According to relevant data, the total output of bauxite in China last year was 601.54 million tons, an increase of 3.6% compared to the previous year. The output in December showed a significant recovery. Bauxite mines in the northern region are gradually resuming production, and new mining areas with potential for expansion are expected to come into operation in the future. As of last Thursday, the inventory of bauxite for alumina production in the factories was 570.556 million tons, an increase of 800,700 tons compared to the previous period, and it remained at a high level overall. Since January this year, the domestic bauxite prices have slightly decreased by 10 to 20 yuan per ton; the prices of imported ores have continued to fall, and the CIF price of 45% Al and 3% Si bauxite from Guinea at the main ports in Shandong has dropped to 64 US dollars per dry ton.
At the import end, from January to November 2025, China's cumulative imports of bauxite reached 185.96 million tons, an increase of 29.3% year-on-year. Imports from Guinea accounted for 74%. Currently, the shipment of bauxite from Guinea is stable, and the outbound volume remains at a high level. However, due to the rainy season in Australia, mining and shipment at Australian mines have significantly decreased. As of the end of last week, the domestic bauxite port inventory was 250.96 million tons, an increase of 886,000 tons compared to the previous week.
According to relevant data, the total output of metallurgical-grade alumina in China in 2025 will be 8941.7 million tons, an increase of 6.8% compared to the previous year, with an increase of 573 million tons. The output in December saw a slight increase compared to the previous month. Some manufacturers had maintenance work, but most were of a phased and small-scale nature. The output at the end of the month basically returned to the normal level. In the second half of 2025, the domestic production capacity of alumina remained stable. As of last Thursday, the built-up production capacity of metallurgical-grade alumina in China remained at 11032 million tons per year, with the operating capacity at 8882 million tons per year. The weekly operating rate increased by 0.12 percentage points compared to the previous week, reaching 80.51%. The recovery of the operating rate of enterprises in Shanxi region offset the decline in the operating rate of enterprises in Guizhou region.
At present, the alumina enterprises have not yet implemented large-scale production cuts. With the rebound in futures prices, the market's wait-and-see attitude has intensified. However, the spot prices are relatively weak. It is not ruled out that some manufacturers may carry out maintenance and production cuts around the Spring Festival. One should promptly pay attention to changes in the operational production capacity. Additionally, in November last year, China had a net import situation for alumina. The previous import windows remained open, attracting supplies to flow in. Since December, the alumina port inventories have risen compared to the previous period.
The pressure on the aluminum oxide inventory remains. Relevant data shows that the total domestic aluminum oxide inventory is currently 531.8 million tons, and it is in a process of rapid increase. The aluminum oxide inventory of electrolytic aluminum plants is 367.6 million tons, which has accumulated to a high level. Their raw material reserves are relatively sufficient. The volume of goods sent by traders to Xinjiang has increased, resulting in a significant growth in the in-transit and stockpile inventories. The aluminum oxide inventory in the exchange has decreased compared to earlier periods. As of last week, the total aluminum oxide inventory of the Shanghai Futures Exchange was 196.1 thousand tons, and the warehouse quantity was 166.6 thousand tons. Overall, it is at a relatively high level.
The spot price of alumina is relatively weak. On January 13th, the aggregated spot price of alumina was 2,688 yuan per ton, which decreased by approximately 10 yuan per ton compared to the beginning of the month, and there was a slight premium compared to the current month futures contract. From the spot transaction situation, the factory price of the deal in Shandong region last week was 2,570 yuan per ton. A certain aluminum factory in Xinjiang region purchased 10,000 tons of spot goods, with the arrival price at 2,920 yuan per ton. In Guangxi region, 0.5 million tons were traded, with the factory price at 2,680 yuan per ton.
From the perspective of the downstream, relevant data shows that last year, the total output of electrolytic aluminum in China was 43.92 million tons, an increase of approximately 800,000 tons, representing a growth of 1.8%. The output in December increased compared with the previous month, and the operating capacity of electrolytic aluminum rose somewhat. The enterprise capacity utilization rate remained at a high level. It is expected that in January this year, the operating capacity of electrolytic aluminum will still increase slightly, and the weekly output of electrolytic aluminum reached 857,000 tons after the New Year's Day. The profits of electrolytic aluminum plants remain substantial. Under the incentive of high profits, enterprises have a strong motivation to maintain the operating capacity at a high level. However, due to the limit of production capacity "ceiling", the space for capacity expansion is not large, and the boosting effect on the demand for alumina is limited. Recently, electrolytic aluminum has entered the seasonal accumulation stage, and the short-term constraints on the production end are not obvious.
Overall, the collective rise in the prices of non-ferrous metals has somewhat boosted the price of alumina, which is in the bottom range. However, the pressure of oversupply still exists. The import side has seen stable shipments from Guinea, the built-up production capacity of alumina remains stable, the operating capacity stays at a high level, and no large-scale production cuts have occurred. In the long term, the upward potential for the price of alumina is limited.
