China's alumina production with 8% growth rate races ahead of primary aluminum, signalling surplus pressure

Compared with last year's third quarter, when China produced 20.91 million tonnes, the latest Q3 total stands 8.86 per cent higher.

The monthly trail reveals how the turnaround took shape. January opened at 7.3 million tonnes, but February sank to 6.7 million tonnes - roughly a 7.7 per cent fall - before production bounced back to 7.325 million tonnes in March, up 8.6 per cent. April dipped again to 6.8 million tonnes, though May and June clawed back the loss with 7 million and 7.12 million tonnes respectively. Things steadied more in the third quarter: July registered 7.5 million tonnes, August edged higher to 7.6 million tonnes, and September eased slightly to 7.5 million tonnes. In short, a shaky opening, a methodical mid-year rise and then a fairly level line heading into autumn.

Rising capacity gives smelters the cushion they need

Behind the improvement in alumina output was a consistent expansion in refining capacity. By September 2025, China's metallurgical-grade alumina capacity had reached about 110.32 million tonnes. Operating capacity rose 1.54 per cent month-on-month, and utilisation sat close to 80.23 per cent. That growth mattered for one simple reason: alumina is the key raw material for aluminum production, so changes in alumina supply and refinery utilisation directly influence how smoothly smelters can run.

Because alumina output was expanding faster than aluminum production - 8.17 per cent quarter-on-quarter for alumina versus 1.38 per cent for aluminum - smelters entered Q3 with more than enough feedstock. This buffer helped them ride out the sharp monthly swings in production without facing bottlenecks or supply stress.

Aluminum production story

Primary aluminum production, meanwhile, followed a steadier arc, even if the monthly fluctuations were sharp. Output increased from 10.8 million tonnes in Q1 to 11 million tonnes in Q2 and climbed again to 11.17 million tonnes in Q3. This translates to quarter-on-quarter growth of 1.7 per cent and 1.38 per cent.

On a yearly comparison, Q3 2025 was 1.33 per cent higher than the 11.02 million tonnes produced in Q3 2024.

Below that smooth quarterly line, the month-to-month figures told a very different story. January's 3.7 million tonnes dropped to 3.3 million tonnes in February - a 9.77 per cent fall - before rebounding 10.93 per cent in March to 3.73 million tonnes. April retreated 2.95 per cent, May rose 3.51 per cent and June edged down 2.83 per cent.

 The third quarter played out in much the same fashion: July climbed 3.27 per cent to 3.76 million tonnes, August matched that figure exactly, and September slipped to 3.64 million tonnes, down 3.19 per cent. Even so, the consistent alumina supply kept smelters from falling off-balance.

Reason behind aluminum production increase

Several developments behind the scenes helped smelters maintain output through this uneven pattern. By September 2025, China's aluminum production capacity had risen to around 45.84 million tonnes, with 44.06 million tonnes actively operating. The slight month-to-month increase in active capacity was tied to new pots starting up in Shandong and Yunnan, alongside technology upgrades in Guangxi. Shanghai Metals Market noted that Phase II replacement projects in Shandong and Yunnan, plus restarts of previously idled pots, fed directly into the uptick in smelting activity.

Downstream demand also carried weight. Construction remained sluggish, but the transport sector - and especially the new energy vehicle market, is consuming most of China's aluminum and is also keeping the smelters busy. This combination of additional capacity, stronger alumina supply and vibrant transport-sector demand created a tightly intertwined production chain through the second half of the year.

Outlook for Q4 2025

The alumina market is likely to stay a little oversupplied in Q4, keeping prices under pressure. Smelters have plenty of alumina on hand, and new capacity in Shandong, Yunnan and Guangxi is still ramping up, so output is estimated to edge slightly higher than in Q3.This will create a surplus.

How will it handle the surplus

China is expected to handle alumina surplus pressures in Q4 2025 through a mix of policy limits, market-driven adjustments and operational fine-tuning. The government's 45-million-tonne cap on primary aluminum production remains central to this strategy, preventing excess aluminum output and indirectly keeping alumina demand in check. At the same time, high-cost refineries are likely to cut production or move into maintenance as prices slip toward cost levels, helping to ease oversupply without destabilising the market.

Exports will continue to play a key role in absorbing excess supply. Alumina shipments jumped 59.3 per cent year-on-year in the first eight months of 2025, reaching about 1.75 million tonnes, and this strong pace is expected to carry into Q4 as producers take advantage of competitive overseas prices.

For smelters, the current surplus provides a helpful buffer. Ample feedstock allows them to manage month-to-month fluctuations in aluminum output without facing supply pressure. Regional price differences and better logistics planning are supporting inventory balance, while production continues to shift toward energy-rich, lower-emission regions, improving operational efficiency.

China is also planning for a more balanced market in the long run. Smelters are expected to adjust their operating rates based on demand, and the country's plan to increase recycled aluminum production by 2027 will reduce its dependence on primary metal. Together with the existing cap on primary aluminum output, these steps give China a more reliable way to control oversupply and keep the market steady through Q4 and beyond.