Domestic alumina spot prices continued to edge lower last week, while transactions benchmarking the futures market remained relatively active. On the supply side, domestic operating capacity of alumina stands at approximately 99 million tonnes per year. Recent operating rates have remained at a stage-high level, with refineries in some regions continuously improving competitiveness through cost reduction and efficiency enhancement. No signs of large-scale production curtailment have emerged for now. Persistent heavy rainfall in parts of Guangxi has restricted shipments from some alumina refineries, while production has not been significantly affected.
In addition, the commissioning progress of a new project in Beihai, Guangxi, has been slower than expected; specific subsequent commissioning plans will be continuously monitored, involving capacity of approximately 2 million tonnes per year. A large-scale alumina refinery expansion project in Southwest China is scheduled to commence trial feeding at the end of this month, with finished products expected to be produced in late September, involving capacity of approximately 1 million tonnes per year.
In this case, the continuously released supply-side increments and rising traders' inventories have increased sales pressure on cargo holders, with some supplies flowing out at lower prices, further exacerbating pessimistic market sentiment. Downstream aluminum smelters maintained a strategy of purchasing at pressed prices, and some futures-spot traders proactively offloaded cargoes at lower prices.
As of last Thursday August 27, 2026, the national alumina capacity utilization rate was 82.27% on average, down 0.52 percentage points week-on-week. According to Mysteel research, domestic alumina restarts and new commissioning were gradually approaching full-capacity operation. Regional output releases steadily ramped up, and the "south-to-north shipment" channel continued to open up, gradually extending coverage to the northwest region in addition to the northeast flow direction.
Last week, domestic traders' inventories of alumina stood at 6.607 million tonnes, up 42,000 tonnes week-on-week. Affected by the supply-demand mismatch, the volume of tradable spot cargoes in the market increased. Coupled with expectations of further new capacity releases from the supply side, cargo holders held a pessimistic outlook on future prices. To alleviate subsequent sales pressure and hedge against operational loss risks, some cargo holders opted for hedging operations on the futures market, leading to an increase in exchnage inventories, while raw material inventories at downstream aluminum enterprises also showed an accumulating trend. Meanwhile, changes in cross-regional transportation patterns have also enhanced the raw material supply guarantee capacity of aluminum smelters.
According to Mysteel's statistics, domestic aluminum enterprises consumed approximately 1.6765 million tonnes of alumina last week, a slight week-on-week increase. Recent domestic aluminum capacity is about 45.42 million tonnes per year, with stable overall downstream operating rhythms; some aluminum smelters mainly restocked on a need-to basis.
Recently, alumina prices have remained in a mild downward trend, but raw material bauxite prices have been firm. As losses across the industry widen, group enterprises with integrated industrial chains have shown low willingness to proactively curtail production. However, some high-cost, pure merchant refineries have faced significant operational pressure. Subsequent attention still needs to be paid to possible large-scale production adjustments in regions such as Shanxi, Henan, and Guizhou.
In addition, the recent weak performance of the futures market has boosted the activity of point-price transactions. Downstream buyers procured and restocked in small quantities at low prices, while most refineries primarily executed existing long-term contracts. Persistent supply surplus and cost support have become the main contradictions in the market. It is expected that the spot price will continue its stable-to-weak trend, with the price running range at Yuan 2,550-2,650/tonne.
Written by Regina WANG
wangjiaqie@mysteel.com
