2019 Aluminum Industry Performance

2019 Aluminum Industry Performance

In 2019, China’s aluminum industry continued to advance supply-side structural reform, strictly curbing the addition of new electrolytic aluminum capacity and rigorously enforcing the capacity‑replacement policy. The sector maintained a stable production and operational performance, with significant improvements in smelting profitability; however, prices remained volatile and declined, while international trade tensions intensified.

I. Production of smelting products declined slightly, while aluminum prices continued to fluctuate and fall. In 2019, alumina and primary aluminum output totaled 72.47 million tons and 35.04 million tons, down 1% and 0.9% year on year, respectively, while aluminum fabricated products reached 52.52 million tons, up 7.5% year on year. Aluminum prices remained weak, trading in a range throughout the year, with an average spot price of RMB 13,960 per ton, down 2.1% from the previous year.

II. Profits in the smelting sector improved markedly, helping to stabilize the overall performance of the aluminum industry. In 2019, large-scale aluminum enterprises reported profits of RMB 40.1 billion, up 3.1% year on year. Among them, the aluminum mining and beneficiation segment generated RMB 180 million in profit, while the processing segment recorded RMB 19.5 billion—down 75% and 2.1%, respectively, compared with the previous year. Throughout the year, the release of compliant electrolytic aluminum capacity fell short of expectations, and sporadic events such as natural disasters and safety incidents led to production cuts, easing supply‑demand imbalances. Meanwhile, key input costs—including electricity, alumina, and carbon anodes—declined, driving aluminum smelting profits to RMB 20.5 billion, a year-on-year increase of 11.7%, which became the primary factor supporting the improvement in the aluminum industry’s overall profitability.

III. Bauxite imports surged, while aluminum product exports saw both volume and price decline. In 2019, the total value of aluminum product trade reached US$26.3 billion, down 5.5% year on year. Imports totaled US$10.7 billion, up 2.5%, while export value stood at US$15.6 billion, a 10.4% year-on-year drop. Overseas bauxite supply continued to expand, with annual bauxite imports exceeding 100 million tonnes, up 21.9% from the previous year. Aluminum product exports amounted to 5.15 million tonnes, down 1.6% year on year, while total export value fell by 7.2%. The average export price of aluminum products declined by 5.7% year on year, reflecting a simultaneous drop in both volume and price.

IV. Transformation and upgrading are accelerating, while the risk of overcapacity in alumina is intensifying. The electrolytic aluminum industry is rigorously implementing the capacity‑replacement policy and speeding up its relocation to regions such as Yunnan and Inner Mongolia. In alumina production, a major breakthrough has been achieved in high‑temperature electrostatic baghouse hybrid dust‑control technology, reducing particulate emissions to below 5 mg/m³—a 95% year‑on‑year decline in emission concentrations. Influenced by ample overseas bauxite supplies, alumina capacity is expanding rapidly; by the end of 2019, total commissioned capacity exceeded 87 million tonnes, further exacerbating the risk of overcapacity.

In 2020, the aluminum industry continued to face risks of overcapacity, with downstream demand remaining subdued and the international trade environment characterized by complexity and volatility. The sector’s stable operation remained under pressure. In line with the directives of the Central Economic Work Conference, the industry will continue to deepen supply-side structural reform, implement standardized management practices, strengthen self-regulation, strictly control the addition of new electrolytic aluminum capacity, rigorously enforce capacity‑replacement policies for electrolytic aluminum, curb the disorderly expansion of alumina production capacity, intensify efforts to promote intelligent and green upgrades, accelerate the research, development, and application of high‑end aluminum products such as aerospace and automotive alloys, and continually broaden the range of aluminum applications, thereby fostering high‑quality industry growth.

(Ministry of Industry and Information Technology, Raw Materials Department)

--Reprinted from “Henan Nonferrous Metals Brief, Issue 3”