"Sky-high" capacity approaching its peak
According to data from the China Nonferrous Metals Industry Association, domestic alumina total capacity reached 108 million tonnes in 2025, with 8.3 million tonnes of newly added capacity actually put into operation that year. In 2025, China's total alumina output reached 94,448,000 tonnes, up 9.4% year-on-year, of which metallurgical-grade output was 89.28 million tonnes and chemical-grade output was 5.168 million tonnes – both hitting record highs.
In 2026, new alumina projects in China continue to be commissioned, and the capacity expansion momentum persists. As of early August, the country's total built capacity for metallurgical-grade alumina had exceeded 120 million tonnes per year, with operating capacity at about 96.05 million tonnes per year and an utilisation rate of approximately 79%.
Oversupply is likely the biggest "underlying theme" for the alumina market this year.
Demand:
The "cap" on electrolytic aluminium locks in limited room for growth
Alumina demand is highly concentrated in the electrolytic aluminium sector. In 2025, as alumina prices retreated, aluminium producers' profit margins rebounded sharply, and electrolytic aluminium capacity began a sustained, modest upward trend, generally operating at high levels. Entering 2026, with some new capacity coming online, electrolytic aluminium capacity in operation hit new highs, already very close to total built capacity. According to data from Baiinfo, as of May 21, 2026, China's theoretical built capacity for electrolytic aluminium (calculated based on operable facilities) stood at 48.064 million tonnes, with theoretical operating capacity at 44.824 million tonnes. It is estimated that in 2026, 1.424 million tonnes of electrolytic aluminium capacity are scheduled for closure, while 2.198 million tonnes of new capacity are planned to start up and 300,000 tonnes of restarted capacity are yet to be released.
Domestic operating electrolytic aluminium capacity has hit the policy "ceiling" of 45 million tonnes, with capacity utilisation exceeding 98%, and net incremental volume within the year will be extremely limited.
Raw Materials:
Supply-side disruptions at the mine end weigh on costs
Bauxite accounts for 45% to 60% of alumina production costs and is the core variable determining profitability across the industry. Multiple disruptions on the supply side are systematically pushing up this cost curve.
Guinea contributes about one-third of global bauxite production and is the dominant source of China's imported bauxite, accounting for as much as 74% of imports in 2025. In the past two years, Guinea has rolled out a series of policy measures in succession, including raising export duties, revoking idle mining concessions, preparing to launch a pricing index (GBX), and requiring foreign mining companies to build alumina refineries locally. In addition, overseas geopolitical conflicts remain volatile, pushing up energy and shipping costs. These factors have a non-negligible impact on China's alumina industry, which is highly dependent on imports.
Market:
Purification is difficult, and high-end segments remain constrained
With the rapid rise of tracks such as lithium battery separator coatings, sapphire substrates, electronic ceramics, and spherical thermal-fill materials for AI servers, market demand for 4N–5N high-purity alumina has seen explosive growth.
In 2025, the global high-purity alumina market size was US$3.24 billion. The market is projected to grow from US$3.41 billion in 2026 to US$4.97 billion by 2034, representing a compound annual growth rate of 4.8% over the forecast period. The Asia-Pacific region dominates the high-purity alumina market, accounting for 66.98% of the global share in 2025.
However, capacity does not equal high-end capacity. 5N and above high-purity alumina remains dominated by international giants such as Japan's Sumitomo Chemical, Germany's Sasol, and France's Baikowski.
At present, domestic high-purity alumina powders still lag in ultra-high purity control, stable mass production, and adaptability for specialised applications. For example, in nanoscale uniformity control, uneven grain-size distribution leads to fluctuating thin-film performance – especially in the