China's Alumina Operating Capacity Set to Fall in October as Prices Squeeze Margins

SMM September 30 news:

According to SMM data, China's metallurgical-grade alumina production in September 2025 (30 days) increased by 1.52% month-on-month and 10.00% year-on-year. As of the end of September, China's metallurgical-grade alumina built production capacity was approximately 110.32 million tons, with the actual operating capacity rising by 1.54% month-on-month and an operating rate of 80.23%.

The daily average output of alumina achieved a slight increase this month, but the growth rate was suppressed due to the following factors: At the beginning of the month, due to the "September 3 Military Parade" event, some alumina plants in the north temporarily reduced the calciner load during the parade period. Meanwhile, some enterprises in the south underwent planned routine maintenance, which also reduced the calciner load. Additionally, the decline in alumina prices narrowed profit margins for enterprises, dampening their enthusiasm for production increases. By mid-to-late September, as the parade-related restrictions and routine maintenance concluded, the operating rates of enterprises gradually recovered, driving a slight increase in production for the entire month. Although spot prices fell in September, leading to narrowed profits, calculations based on the monthly average price still indicated some profit margins. As a result, alumina enterprises did not schedule production cuts or maintenance in September, and the overall operating rate remained at a relatively high level.

From a regional perspective:
In September, the price difference between the northern and southern domestic alumina markets was significant. At the beginning of the month, routine maintenance at enterprises in the southern region led to a slight tightening of supply, supporting prices and keeping them firm. By mid-to-late September, as supply recovered, supplemented by imported alumina and the "northern goods moving south," the price support intentions of holders in the southern region slightly weakened. Under the impact of low-priced sources from the north and imports, spot alumina prices in the south declined. However, the profitability of alumina production capacity in the south remains relatively good, and no production cuts have been reported so far.

In contrast, quotations in the northern market remained under pressure throughout the month, maintaining a downward trend. Entering October, the monthly average price is expected to fall below the cash cost of high-cost enterprises, and some companies are likely to incur losses and reduce production.

Outlook for the next month:
The alumina market is expected to continue in a surplus pattern in October. Entering October, the monthly average price is projected to face downward pressure and gradually approach the cost line. Some high-cost enterprises will likely face losses and may proactively adopt production reduction and maintenance measures. As the supply side contracts, the current surplus situation is expected to ease to some extent. However, as supply and demand adjustments require time, prices are likely to remain weak and volatile. The operating capacity of alumina in October is projected to decrease, with the industry's operating capacity expected to be around 88.98 million tons.