China Alumina Spot Prices Hold Steady at RMB 2,550-2,680
Domestic alumina inventories rose to 6.78 million tonnes as production cuts offset weak demand, keeping prices in a narrow range.
Key points
- Domestic alumina capacity utilization dropped to 82.27 percent as high bauxite costs pressured producers, despite new capacity additions in Guangxi.
- Trader inventories rose by 70,000 tonnes to 6.78 million tonnes, reflecting active refinery sales and pre-holiday restocking by aluminum smelters.
- Alumina spot prices are expected to remain steady-to-soft in the RMB 2,550-2,680 per tonne range due to persistent supply surplus and weak demand growth.
China alumina spot prices have stabilized despite widening industry losses and weak underlying demand. According to AL Circle, the market is currently in a tug-of-war where expectations of production cuts provide a floor for prices, while fundamental oversupply keeps upward momentum limited. This dynamic has resulted in a cautious trading environment where the basis between futures and spot has narrowed, preventing a sharp decline but also blocking significant gains.
The supply side remains under pressure from new capacity additions, even as some existing producers struggle with profitability. A major new project in Guangxi began trial production on its first line, adding approximately 1 million tonnes per year to the domestic total of 99.1 million tonnes per year. Simultaneously, a northern refinery has halted front-end feeding due to heavy losses, though it continues to maintain calcination capacity through internal coordination. These mixed signals mean that while some units are idling, the overall operating capacity remains at a cyclical high.
Capacity Utilization Declines Slightly
As of September 17, 2026, domestic alumina capacity utilization averaged 82.27 percent, a drop of 0.22 percentage points from the previous week. This slight decline reflects the gradual impact of high raw material costs, particularly bauxite, on producers in both northern and southern regions. Some enterprises are planning phased production curtailments once they meet their annual output targets, but many are holding back to maintain efficiency and lower per-unit costs. The decision to cut output is complicated by the high share of long-term contracts, which provides a revenue floor and discourages rapid capacity reduction.
Inventories Build Ahead of Holidays
Domestic alumina trader inventories increased to 6.78 million tonnes last week, marking a rise of 70,000 tonnes. This accumulation is driven by refineries actively selling to ease inventory pressure and the shift of in-transit goods into smelter raw material stocks and delivery warehouses. Although downstream aluminum smelters currently hold ample raw materials, some short-term procurement is occurring ahead of the Mid-Autumn and National Day holidays. This restocking behavior, combined with cross-region shipments, has contributed to the build-up in visible inventories, reinforcing the supply surplus narrative.
Demand Growth Lags Supply Expansion
Demand growth is failing to keep pace with supply expansion, with domestic aluminum smelters consuming about 1.6775 million tonnes of alumina last week. While this represents a slight increase from the prior week, it is insufficient to absorb the available supply. Domestic aluminum capacity stands at approximately 45.42 million tonnes per year, and smelters in the northwest region are maintaining a tender-based purchasing approach, replenishing stock only as needed. The market is characterized by a buyer’s advantage, where suppliers are focused on securing long-term contract volumes to ensure stability, rather than chasing spot price premiums. Consequently, the supply-surplus trend shows no sign of immediate improvement, and prices are expected to remain steady-to-soft within the RMB 2,550-2,680 per tonne range.
