Shanghai, March 28 (SMM) – On March 28, China’s Ministry of Industry and Information Technology (MIIT), along with nine other ministries, released the Action Plan for the High-Quality Development of the Aluminium Industry (2025–2027). The policy aims to significantly strengthen the aluminium supply chain’s resilience, resource security, and green transformation.
Following the announcement, domestic aluminium-related stocks rallied. Minfa Aluminium surged to its daily limit during intraday trading, while Chang Aluminium, Nanshan Aluminium, and Pengxin Resources also posted sharp gains.
Key Policy Targets by 2027:
- Domestic bauxite reserves to increase by 3–5%
- Recycled aluminium production to exceed 15 million tonnes
- Over 30% of primary aluminium capacity to reach benchmark energy efficiency levels
- Clean energy to account for more than 30% of primary aluminium power use
- 15%+ utilization rate of newly generated red mud
- Enhanced industrial clustering and supply chain security
- Stronger innovation in low-carbon smelting, high-end materials, and precision processing
Focus on Raw Material Security and Recycling
The plan outlines a multi-pronged approach to strengthen upstream resource security. These include:
- Accelerating bauxite exploration and development, especially low-grade and high-sulfur ores
- Promoting integrated utilization of associated minerals and industrial waste
- Scaling up recycled aluminium through regional recycling bases, industry clusters, and “Internet + Recycling” platforms
Stricter Oversight on Alumina Projects
The plan introduces stricter approval requirements for new or expanded alumina refineries. Projects must meet top-tier energy consumption and environmental standards. Crucially, new capacity using boehmite as feedstock will no longer be approved, and alumina projects must be backed by matching bauxite mining rights and red mud utilization capabilities.
According to SMM, while this may cap future capacity additions, over 10 Mt of new alumina capacity is already under construction and will proceed as planned. Hence, short-term supply expansion is unlikely to be disrupted.
Electrolytic Aluminium: Capped but Cleaner
The action plan maintains China's “capacity ceiling” for primary aluminium and pushes for relocation of smelting operations to clean energy-rich areas such as Inner Mongolia, and Xinjiang. New capacity must meet stringent environmental and energy use criteria, including:
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Energy consumption not exceeding 13,000 kWh/ton of aluminium
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Use of large-scale (≥500kA) electrolytic cells
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Prohibition of new capacity in heavily polluted regions
The government also calls for greater local use of molten aluminium for processing, which may tighten supply of standard aluminium ingots and reduce market liquidity for deliverable units.
SMM View
SMM believes that the policy reflects China's long-term strategy to promote aluminium sector transformation through resource self-sufficiency, circular economy, and green innovation. The 3–5% increase in domestic bauxite reserves and the 15 Mtpa recycled aluminium target are feasible and strategically important. Recycled aluminium will help offset the limitations imposed by the primary aluminium capacity cap.
Regionally, the integration of electrolytic aluminium and processing facilities will boost efficiency, but may reduce the volume of market-tradable aluminium ingots, potentially tightening the supply of deliverable resources in the spot and futures markets.
Aluminium remains a critical material for China’s industrial and green transition strategies. The new policy framework provides a clearer pathway for high-quality, sustainable growth in the aluminium sector—balancing domestic resource development, energy efficiency, and technological innovation.
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