China Aluminium Supply and Policy Shifts
Key Questions
Why is Chinese aluminium output rising despite policy caps?
Profits have driven higher production, though it remains constrained by government limits. Alumina imports have reached an 11-year high.
What export trends are emerging from China?
Unwrought alloy exports jumped 179.7% YoY in April, while wire exports rose 30.6% YoY after tax rebate changes. Record exports exceeding 680kt are forecast.
What is Fitch's updated view on China Hongqiao?
Fitch revised the outlook to positive, citing benefits from tight supply conditions favoring low-cost APAC smelters.
Output rising on profits but capped by policy; alumina imports surge to 11-year high. Unwrought alloy exports +179.7% YoY April. Wire exports +30.6% YoY (first nine months 2025) due to tax rebate removal. Overcapacity reframed as renewable grid-balancing asset. Fitch revises China Hongqiao outlook to positive. Record China exports forecast (>680k tons). AI infrastructure demand emerges as new driver. Downstream processing rates dip to 64.1% with structural divergence. Baise smelter reduction and energy inspections confirm real enforcement. Guinea bauxite controls add upstream vulnerability. OECD report quantifies Chinese subsidies at 3-8x rivals, attributing 60% of market share gains to state support. May export data (630kt, +16% YoY) confirms export surge. Fitch report highlights tight supply favoring low-cost APAC smelters, with upgrades for Vedanta and Hongqiao.