Alumina Market Analysis for February 2025

As we entered 2025, the domestic spot market experienced a significant price decline, influenced by factors such as continued increases in alumina production, rising inventories throughout the industrial chain, and strong downward pricing pressure from downstream aluminum smelters. Overseas alumina prices also showed a noticeable downward trend. In February, trading activity in the spot market continued to weaken, leaving the market in a state of stalemate and ongoing negotiation.

　　01 Market Overview

　　As we enter 2025, the domestic spot market has seen a significant drop in prices, influenced by factors such as continuously rising alumina production, a rebound in inventory levels across the industrial chain, and strong downward price pressure from downstream aluminum smelters. Overseas alumina prices have also shown a marked decline. In February, trading activity in the spot market continued to weaken, leaving the market in a state of stalemate and ongoing negotiation.

　　02 Market Analysis

　　Alumina price

　　1. Domestic market price

　　In February 2025, domestic spot prices for alumina initially fell before rebounding slightly. The weighted monthly average price of alumina was 3,450 yuan per ton, down 1,442 yuan per ton from the previous month, representing a month-on-month decline of 29.48%. However, prices have begun to stabilize and show signs of halting their downward trend.

　　China Alumina Price List by Region (Unit: RMB/ton)

　　2. Overseas market prices

　　In February, cumulative overseas alumina transactions totaled approximately 145,000 tons, with prices continuing to fluctuate and decline. As of the end of February, the FOB price in Australia stood at around USD 485 per ton, down 12.77% month-on-month; ocean freight rates remained stable at about USD 25 per ton compared to the previous month. According to Mysteel’s information, a 1-million-ton-per-year metallurgical-grade alumina project in Indonesia has officially begun operations, and the Jinjiang Indonesia project is also expected to start production in March, further reinforcing an oversupplied global alumina market.

　　Overseas alumina spot prices (unit: USD/ton)

　　Alumina production

　　According to Mysteel statistics, as of the end of February 2025, China's installed alumina capacity reached 108.7 million tons per year, up 1.87% month-on-month and 3.82% year-on-year; operating capacity stood at 91.2 million tons per year, increasing 1.62% month-on-month and 17.75% year-on-year.

　　China’s Alumina Production Capacity (Unit: 10,000 tons/year)

　　China’s Alumina Production and Capacity Utilization Rate (Unit: 10,000 tons)

　　Supply and Demand Analysis

　　On the supply side: As of the end of February, China's operational alumina capacity stood at approximately 91.2 million tons per year. Capacity has been released or fully restored in Guangxi, Shanxi, and Henan, and domestic alumina production is expected to continue rising next month.

　　On the demand side: As of the end of February, China’s operating capacity for primary aluminum electrolysis stood at 43.6183 million tons per year, essentially unchanged from the previous month. The release of newly commissioned capacity through replacement projects across various regions has been slow. With the recovery of profits in the primary aluminum industry, some smelters that had previously reduced production or undergone maintenance are still planning to resume operations, and there is a strong willingness within this phase to maintain stable and high production levels.

　　2024 China Alumina Supply and Demand Balance Sheet (Unit: 10,000 tons)

　　Cost-profit analysis

　　1. Cost Analysis

　　According to data from Mysteel, as of February 2025, the weighted average full cost of China's alumina industry was 3,414.02 yuan per ton, down approximately 21.84 yuan per ton from the previous month.

　　Raw Material Market: Domestic bauxite prices remain stable with a slight downward trend, while imported ore prices are on a downward trajectory. The caustic soda market has been experiencing continuous declines since the Chinese New Year, driven by the sale of futures warehouse receipts. The thermal coal market is mainly characterized by volatile downward trends, with wider price drops in some local regions, further exacerbating the oversupply situation in coal.

　　Trend of China’s weighted average alumina cost (unit: yuan/ton)

　　2. Profit Analysis

　　According to Mysteel statistics, in February, the average profit margin for China's alumina industry was 35.98 yuan per ton, down 1,420.52 yuan per ton from the previous month. By February, alumina prices had fallen to the cost threshold, causing the industry’s overall profits to shrink significantly compared to the previous month. As of now, nearly 50% of China’s alumina production capacity is already operating at a loss that covers full costs.

　　Overseas Market Analysis

　　According to data from Mysteel, overseas alumina production in January 2025 reached 4.8 million tons, an increase of 0.8% year-on-year.

　　The 1-million-ton-per-year SGAR metallurgical-grade alumina project, jointly invested in by Indonesia’s PT Inalum and PT Antam, will officially begin production at the end of December 2024. As of the end of February 2025, Asia’s (excluding China) total alumina capacity reached 25.48 million tons per year, an increase of 3.5 million tons per year compared to the previous year, accounting for 32% of the global overseas capacity.

　　Australia’s alumina supply remains stable; Brazil’s existing alumina production capacity stands at 10.55 million tons per year, and its February exports totaled 526,000 tons, representing a year-on-year increase of 18.9%.

　　In the first half of this year, the increase in overseas alumina supply will be concentrated in Indonesia and India. In addition to the two newly commissioned projects in Indonesia, it’s also important to monitor whether the remaining 1.5 million tons of the Vedanta expansion project in India can come on stream as scheduled in the first quarter.

　　Monthly Overseas Alumina Production (Unit: 10,000 tons)

　　03 Market Forecast

　　In the short term, the resumption of work in non-aluminum industries is expected to boost some demand. However, the overall supply-demand balance for alumina remains relatively loose. We anticipate that domestic alumina prices will fluctuate narrowly next month, with a price range of 3,100 to 3,500 yuan per ton. Meanwhile, production is steadily increasing as newly commissioned capacity continues to come online.

　　This article was compiled and organized by Henan Keda Dongda.

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　　Data source: MySteel.com