New Aluminum Capacity Replacement Projects Launched in April, with Slight Fluctuations in Proportion of Liquid Aluminum During the Month [SMM Data]

SMM 4.30:

According to SMM statistics, domestic aluminum production in April 2025 (30 days) increased by 2.6% YoY and decreased by 2.9% MoM. The proportion of liquid aluminum in domestic aluminum smelters fluctuated slightly in April, with the industry's proportion of liquid aluminum declining by 0.52 percentage points MoM to 74.0% this month. This was mainly due to, on one hand, the relocation of newly added replacement projects, with no output from the new sites and some liquid aluminum from the old plants being cast into ingots; on the other hand, individual aluminum smelters in north-west China and Chongqing reported downstream production cuts, leading to a slight increase in casting ingot volumes at month-end. Based on SMM's data on the proportion of liquid aluminum, domestic aluminum casting ingot volumes in April decreased by 0.9% YoY to approximately 944,400 mt.

Capacity Changes: As of the end of April, SMM estimated that the existing aluminum capacity in China was approximately 45.69 million mt (SMM made adjustments this month after considering capacity replacement and the dismantling of old plants, eliminating some double-counted capacities). The operating aluminum capacity in China was approximately 43.91 million mt, with the industry's operating rate increasing by 0.3 percentage points MoM and 1.8 percentage points YoY to 96.1%. In terms of newly added operating capacity, aluminum smelters in the Sichuan and Chongqing regions have basically completed production resumptions, with operating capacity increasing. A replacement and upgrade project at an aluminum smelter in Qinghai has reached full production. Regarding production cuts, individual aluminum smelters in Shanxi and Chongqing have gradually carried out minor maintenance, resulting in a slight decrease of 20,000 mt/year in operating capacity. In addition, SMM learned that an aluminum smelter initiated the first batch of a 200,000 mt/year aluminum replacement project, relocating from Shandong to Yunnan, within the month.

Production Forecast: Entering May 2025, domestic aluminum operating capacity is expected to remain at highs. The second batch of capacity replacement projects from Shandong to Yunnan at an aluminum smelter is expected to commence in Q3, with the first batch of projects expected to achieve output in May. Additionally, some enterprises have recently undergone capacity maintenance. SMM learned that many have adopted a method of small-batch, rotational maintenance, causing minimal disruption to the supply side. Going forward, attention should still be paid to the downstream operating conditions of aluminum in various regions amid the backdrop of weakening demand.