Domestic alumina spot prices held steady with slight adjustments last week, and scattered transactions showed mixed pricing.
On the supply side, recent domestic alumina operating capacity stayed at around 99.4 million tonnes per year. A new alumina project in Beihai, Guangxi, is expected to start feeding material for trial production late this month, with associated capacity of about 2 million tonnes per year, and specific progress will be tracked closely. Meanwhile, roughly half of the industry's capacity is now running at a full-cost loss, and some producers have even slipped into cash-flow losses. Costs show no signs of easing though, and with few bullish drivers in sight, sector loss pressures keep mounting.
Prices held flat last week mainly because new capacity releases are still expected in southern China this month. Although futures-spot trading volumes have risen recently and slightly tightened overall spot availability, the absence of large-scale production cuts means fundamentals remain soft, leaving buyers and sellers locked in a deadlock.
As of last Thursday, September 10, 2026, China's alumina capacity utilization rate stood at 82.40 percent, barely changed week on week. According to Mysteel surveys, domestic operating capacity stays highly stable while regional supply pressure becomes more prominent. Some plants are already urging downstream buyers to take delivery amid inventory buildups.
National alumina traders' inventory came in at 6.71 million tonnes, up 45 thousand tonnes week on week. Cross-regional shipments keep rising and transit times are lengthening. Meanwhile, a widening futures-spot basis has boosted arbitrageurs' offtake inquiries, pushing inventories in transit and on platform stocks notably higher. Aluminum smelters hold ample raw-material stocks and are buying on a small, need-based add-on basis, so overall inventories stayed on a mild upward trend.
Mysteel data show domestic smelter alumina consumption at about 1.68 million tonnes week, a slight rise again week on week. Domestic aluminum operating capacity stays near a high level at around 45.42 million tonnes per year. With more low-priced spot offers circulating, downstream smelters maintain rigid, need-based purchasing.
Currently, new and restarted capacity is gradually converting into steady incremental supply, and more new capacity is still expected in the fourth quarter. Routine maintenance cuts offer only limited support. Looking mid-to-long term, supply pressure can only ease if some inland small-to-mid players, high-cost coastal capacity, and mid-to-large plants under intense regional competition actually cut output or shift to flexible production. Only a widening, consolidated reduction that trims spot availability can fix the current supply-demand mismatch.
In the near term, costs are firm-to-rising and still lend some support, while buyers' willingness to push prices down hard has eased versus earlier. Spot prices are expected to stay weak but decelerate in pace, trading in a range of Yuan2,550-2,700/tonne.
Written by Regina WANG
wangjiaqie@mysteel.com
