China Set to Curb Alumina Operating Capacity Amid Margin Pressure

Industry sources indicate that China is preparing to reduce operating capacity at several alumina refineries in October as profit margins continue to narrow. With alumina prices under persistent pressure, many producers are now operating at or below breakeven levels, prompting maintenance shutdowns and output cuts.

Reasons Behind the Reduction

 1. Weak Profitability and Falling Prices

Chinese alumina refineries have been facing shrinking margins since late September 2025. Persistent price declines have led many producers to lower production rates or temporarily halt operations to stem financial losses.

 2. High Stockpiles and Buyer Pressure

Substantial inventories of imported bauxite in China have shifted market leverage toward buyers, who are now negotiating lower prices. Refineries, in turn, are offering discounts to secure sales and maintain cash flow.

 3. Lower Bauxite Prices from Guinea

According to Mysteel, Guinean bauxite (45 % Al, 3 % Si) is currently priced around US $73.5 per ton, reflecting weakened alumina demand and downward pressure across the supply chain. Sellers have been cutting prices to encourage procurement and reduce stock burdens.

Production Scale and Outlook

As of late September 2025, China’s total alumina refining capacity stood at 110.32 million tons, with an actual operating rate of around 80.23 %. Industry forecasts suggest that in October, operating capacity may fall to roughly 88.98 million tons as more plants slow or suspend production.

Reports earlier this year indicated that some producers were already running at a loss of about 300 RMB per ton, which has accelerated the decision to enter maintenance cycles or reduce output.

Market Implications

 • Reduced Supply from China

As the world’s largest alumina producer and consumer, any significant slowdown in Chinese output could reshape global supply–demand dynamics.

 • Rising Competition Among Bauxite Suppliers

Weaker demand from Chinese refiners may intensify competition among suppliers in Guinea and other regions, pushing bauxite prices even lower.

 • Potential for a Price Rebound

Should output cuts persist through the fourth quarter, the market may swing toward a supply deficit, creating conditions for a future alumina price recovery.

 • Profitability Risks for High-Cost Producers

Refineries relying on costly imported ore or with high energy costs face the greatest financial pressure in this environment.