In 2024, under the dual influence of the global economic pattern and domestic policy orientation, China’s aluminum industry has shown a complex and changeable operating situation. On the whole, the market size continues to expand, and aluminum production and consumption have maintained growth, but the growth rate has fluctuated. On the one hand, driven by the strong demand for new energy vehicles, photovoltaic, electric power and other fields, the application range of aluminum continues to expand, injecting new impetus into the development of the industry; On the other hand, the downturn in the real estate market has put some pressure on the demand for aluminum in the construction sector. The aluminum industry’s adaptability to market changes, response strategies to abnormal fluctuations in raw material prices, and initiatives to internalize hard requirements for green and low-carbon development are still being explored and gradually strengthened. The emergence of new quality productivity of the industry has not yet met the requirements of the development of the industry, and the aluminum industry is facing many challenges.
1.aluminum industry chain market analysis
Alumina
In June 2024, the output was 7.193 million tons, an increase of 1.4% year-on-year, and the month-on-month increase was limited. In the following parts of the resumption of production capacity released, the new production in Inner Mongolia can be gradually released, and the operating capacity has maintained an increasing trend.
In 2024, the price of alumina fluctuates sharply, showing obvious phased characteristics. In the first half of the year, the price as a whole showed an upward trend, of which from January to May, the spot price of alumina rose from about 3,000 yuan/ton at the beginning of the year to more than 4,000 yuan/ton, an increase of more than 30%. The main reason for the price increase in this stage is the tight supply of domestic bauxite, resulting in higher alumina production costs.
The sharp rise in alumina prices has exerted great pressure on the cost of downstream electrolytic aluminum enterprises. To produce 1 ton of electrolytic aluminum needs to consume 1.925 tons of alumina calculation, alumina price rises 1000 yuan/ton, electrolytic aluminum production cost will increase by about 1925 yuan/ton. In response to cost pressure, some electrolytic aluminum enterprises began to reduce production or slow down the resumption of production plan, such as province of Henan, Guangxi, Guizhou, Liaoning, Chongqing and other high-cost areas of some enterprises in China have announced overhaul, tank stop or slow down the resumption of production.
Electrolytic aluminum
In 2022, the production capacity was about 43 million tons, which has approached the ceiling red line. As of December 2024, the operating capacity of China’s electrolytic aluminum industry was 43,584,000 tons, an increase of 1.506 million tons, or 3.58%, compared with 42,078,000 tons at the end of 2023. At present, the total production capacity of domestic electrolytic aluminum has approached the “ceiling” of 45 million tons of production capacity. The implementation of this policy is of great significance to the long-term development of electrolytic aluminum industry. It helps control overcapacity in the industry, avoid vicious competition, and promote the development of the industry in a high-quality, green and sustainable direction. By eliminating backward production capacity and improving energy efficiency, enterprises are encouraged to increase technological innovation and investment in energy conservation and emission reduction, and improve the overall competitiveness of the industry.
Aluminum processing
With the improvement of lightweight requirements in various industries, the demand for aluminum processed products continues to increase, and the products are developing in the direction of high-end, intelligent and environmental protection. In the construction field, despite the overall downturn in the real estate market, aluminum doors and Windows, curtain walls and other products still have stable demand in new commercial buildings, high-end residential buildings and old building renovation projects. According to statistics, the amount of aluminum used in the construction industry accounts for about 28% of the total aluminum consumption. In the field of transportation, especially the rapid development of new energy vehicles, the demand for aluminum processing materials has shown a strong growth momentum. With the acceleration of automobile lightweight process, aluminum alloy is more and more widely used in body structure, wheel hub, battery tray and other components. Taking a new energy vehicle as an example, the amount of aluminum used in its body exceeds 400 kg/vehicle, which is significantly increased compared with traditional fuel vehicles. In addition, the demand for aluminum conductors, aluminum radiators and other products in the power industry has also risen steadily with the construction and upgrading of the power grid.
Recycled aluminum
In recent years, the production has continued to rise, 2024 is a landmark year for China’s recycled aluminum to make a major breakthrough, and the annual recycled aluminum production has broken through the 10 million tons mark, reaching about 10.55 million tons, and the ratio of recycled aluminum to primary aluminum has been nearly 1:4. However, the recycling of waste aluminum, the source of the development of recycled aluminum, is not optimistic.
The development of recycled aluminum industry is highly dependent on the supply of waste aluminum raw materials, and the supply of recycled aluminum raw materials in China is facing a severe situation. The domestic aluminum waste recycling system is not perfect, although China’s old aluminum waste recovery rate in some areas in the world’s leading level, such as cans of aluminum waste recycling can reach 100%, construction aluminum waste recycling can reach 90%, automotive transportation field is 87%, but the overall recovery rate still needs to be improved, mainly because the recycling channels are scattered and non-standard, a large number of waste aluminum resources have not been effectively recycled.
The adjustment of import policy has also had a significant impact on the supply of recycled aluminum raw materials. In recent years, China has implemented stricter control measures on the import of scrap aluminum to strengthen environmental protection and resource management. This led to large fluctuations in imports of recycled cast aluminum alloy raw materials, in October 2024, China’s scrap aluminum imports of 133,000 tons, an increase of 0.81%, down 13.59% year-on-year, the downward trend of imports reflects the instability of supply.
2.Aluminum industry chain market outlook
Aluminium oxide
In 2025, there will be more new production capacity, with an increase of nearly 13%, coupled with the possibility that imported mines may fully replace China’s domestic mines, and the adjustment of the aluminum export tax rebate policy will suppress the increase in demand, and the price will fall with a high probability. Increased supply: China’s new alumina production capacity in 2025 May reach 13.2 million tons, and overseas production capacity is expected to increase by 5.1 million tons in 2025. Price decline: the supply of bauxite and alumina increased, the contradiction between supply and demand eased significantly, and the price gradually fell.
Electrolytic aluminum
The production capacity of the supply side has reached the ceiling, the probability of increasing production is extremely low, overseas production is affected by a variety of factors, and production cannot be carried out efficiently. On the demand side, in addition to the year-on-year decline in real estate demand, other terminal demand showed bright performance, especially in the field of new energy demand growth potential, and global supply and demand maintained a tight balance; Domestic production capacity is close to the red line, a total of 450,000 tons of new domestic production capacity can be invested in 2025, and overseas is expected to add 820,000 tons of new production capacity under the benchmark scenario, an increase of 2.3% compared with 2024. Demand growth: The downstream demand structure has changed significantly, the impact of traditional real estate has weakened, and the new demand dominated by photovoltaic and new energy vehicles is expected to be less than 260,000 tons of domestic electrolytic aluminum supply in 2025. Price rise: Shanghai aluminum prices are expected to fluctuate between 19000-20500 yuan/ton in the first half of the year, and stabilize in the second half of the year, and the price range is expected to be 20,000-21,000 yuan/ton.
Aluminium processing
With the rapid development of new energy vehicles, photovoltaic industry and the popularization of 5G technology, the demand for aluminum processed products will continue to increase and is expected to maintain a stable growth trend. Market size expansion: The market size is expected to reach 1 trillion yuan, and the demand for new energy vehicles, photovoltaic, 3C and smart home is strong. Product upgrade: The product is moving towards high performance, lightweight and multi-functional, and the research and development of high-end materials and special function aluminum alloy. Technological progress: intelligent, automation into the mainstream, enterprise investment equipment, control production, improve efficiency and quality, industry-university-research cooperation to promote technological progress.
Recycled aluminium
Entering the growth period, scrap/disassembled vehicles enter the quantitative period, which can fill the phenomenon of insufficient domestic recycled aluminum, and the market has broad prospects, but it is currently facing problems such as insufficient quantity of imported scrap, strong market wait-and-see sentiment, and insufficient inventory. Production growth: According to the Recycled Metal branch of the China Non-Ferrous Metals Industry Association, it will reach 11.35 million tons in 2025. Application field expansion: In the fields of new energy vehicles, construction, electronics and other applications will continue to expand, such as new energy vehicles in the pursuit of mileage improvement, a large number of recycled aluminum alloy to reduce body weight. Increasing industry concentration: Under the two-pronged expansion of large factories’ production capacity and industry norms, some small enterprises will be eliminated by the market, and advantageous enterprises will be able to exert scale effects, reduce costs, and strengthen market competitiveness.
3.Strategy analysis
Alumina: The production enterprise can increase the inventory appropriately when the price is high, wait for the price to fall and then gradually ship; Traders may consider taking short positions before prices fall to hedge through the futures market and lock in profits.
Electrolytic aluminum: Production enterprises can pay attention to the growth of demand in emerging areas such as new energy, adjust the product structure, and increase the production of related products; Investors can buy futures contracts when prices are low and sell them when prices are high according to the macroeconomic situation and market supply and demand changes.
Aluminum processing: enterprises should strengthen technological innovation and product research and development, enhance product added value and market competitiveness; Actively expand emerging markets, such as new energy vehicles, aerospace, electronic information and other fields; Strengthen cooperation with upstream and downstream enterprises to establish a stable supply chain.
Post time: Feb-03-2025
