Limited Commissioning of New Projects Leads to Slow Growth in Aluminum Production in 2025

SMM News, November 24:

Approaching year-end, looking back at the whole year of 2025, China's operating aluminum capacity has further approached the ceiling of compliant capacity. However, few new projects were commissioned during the year, resulting in limited capacity growth. Boosted by earlier production cuts due to losses and the gradual resumption of production from technological transformation projects, China's aluminum production in 2025 is still expected to achieve a YoY growth rate of 1.7%.

China by Province:

Sichuan's operating capacity increased by 255,000 mt compared to the end of 2024, mainly because some aluminum enterprises incurred losses and implemented production cuts and maintenance due to high alumina costs at the end of 2024. These enterprises gradually resumed production from February to April 2025, with a total resumed capacity of 255,000 mt. Additionally, individual enterprises in Guangxi underwent technological transformation due to losses at the end of 2024 and started restarting cells from August to September 2025, contributing a total resumed capacity of 100,000 mt.

During 2025, some aluminum capacity was relocated from Shandong to Yunnan, reducing Shandong's operating aluminum capacity by 740,000 mt compared to the end of 2024, with all related capacity transferred to Yunnan. Additionally, an aluminum smelter in Yunnan resumed production of 30,000 mt of previously idle capacity, bringing Yunnan's total operating capacity to an increase of 770,000 mt compared to the end of 2024.

In addition, the following changes in operating aluminum capacity occurred in 2025 in China:

1. The commissioning of a relocation and upgrade project at an aluminum smelter in Qinghai added 100,000 mt of operating capacity;

2. The completion of a previous technological transformation at an aluminum smelter in Guizhou led to the resumption of production, increasing capacity by 53,000 mt.

Overall, China's operating aluminum capacity in 2025 increased by 538,000 mt compared to the end of 2024. With the further manifestation of production growth from some newly commissioned capacities in 2024, China's aluminum production in 2025 is expected to increase by approximately 700,000–800,000 mt. Looking ahead, from the end of 2025 into 2026, a new project at an aluminum smelter in Xinjiang is expected to be commissioned, with a projected net increase in existing capacity of 200,000 mt; a new project at an aluminum smelter in Inner Mongolia is expected to be commissioned, with a projected net increase in existing capacity of 350,000 mt; an aluminum smelter in Henan is expected to relocate some capacity to Inner Mongolia, and after commissioning, this is projected to result in a net increase in operating capacity due to the utilization of some idle capacity indicators; a relocation and upgrade project at an aluminum smelter in Shanxi is expected to contribute a net increase in operating capacity.

Regions Outside China, operating capacity as of now has increased by approximately 500,000 mt compared to the end of 2024. Details are as follows:

Capacity increases:

1. Production resumptions at three aluminum smelters owned by a German enterprise are progressing steadily, expected to contribute 150,000 mt of operating capacity growth for the full year;

2. An aluminum smelter in Spain resumed production. Although the process was temporarily halted due to a power outage, it subsequently resumed and is expected to reach full capacity in 2026;

3. In Indonesia, an aluminum plant launched the second phase of its project in 2024 but suspended operations due to cost issues. The capacity reached full production in 2025. Two new aluminum smelter projects are scheduled to commence their first phases by the end of 2025, with full capacity expected in 2026. Total capacity growth involved in Indonesia amounts to approximately 650,000 mt;

4. An aluminum plant in Malaysia implemented production cuts in 2024 due to an accident. The related capacity resumed operations in Q1 2025, contributing 100,000 mt of operating capacity growth;

5. A new aluminum smelter project in Angola is expected to be energized by the end of 2025, adding 120,000 mt of existing capacity;

6. An aluminum plant in New Zealand resumed production. It had cut production in 2024 in response to energy shortages and resumed in 2025. However, due to persistent power supply risks in 2025, the resumption was suspended. Current operating capacity has increased by 80,000 mt;

7. An aluminum plant in Brazil continues to push for production resumption, contributing around 70,000 mt of operating capacity growth within the year.

Capacity reductions:

1. In October 2025, an aluminum plant in Iceland temporarily halted one production line due to electrical equipment failure, involving an annual capacity of 210,000 mt.