China’s alumina industry maintained a supply surplus in December 2025, with production seeing marginal month-on-month decline due to seasonal maintenance and operational adjustments. As the sector enters 2026, limited production cuts are expected amid ongoing cost pressures, though the market’s fundamental imbalance is projected to persist into the new year. This structural dynamic continues to shape cost fundamentals for downstream aluminum processing chains, including aluminum sheets, bars, tubes, and precision machining sectors.

According to statistics from Baichuan Yingfu, China’s alumina output reached 7.655 million tonnes in December 2025, representing a 1.94% year-on-year increase. The average daily production stood at 246,900 tonnes, a slight decrease of 2,900 tonnes compared to November 2025’s 249,800 tonnes. Despite the monthly dip in daily output, the market remained in a state of oversupply. The production adjustment was primarily driven by scheduled maintenance activities: a major alumina plant in Shanxi province halted its calcination furnaces after completing its annual production targets, while another facility in Henan province implemented phased production suspensions due to planned overhauls and adverse weather conditions.

A critical factor influencing market dynamics is the ongoing cost pressure on alumina producers. By December, domestic alumina spot prices had fallen below the industry’s total cost line, with cash cost losses becoming prevalent in key production regions such as Shanxi and Henan  . This price-cost squeeze is expected to trigger selective production curtailments in mid-to-late January. Additionally, as 2026 long-term supply contracts are finalized, producers may voluntarily reduce operating rates to avoid further inventory buildup, leading to a modest decline in overall rates. Baichuan Yingfu forecasts that China’s alumina output will edge down to approximately 7.6 million tonnes in January 2026, with daily production slightly lower than December’s level.

The supply surplus was further confirmed by December’s supply-demand balance data. Metallurgical-grade alumina production, the primary feedstock for electrolytic aluminum, totaled 7.655 million tonnes in December. Combining this with 224,500 tonnes of imported alumina (calculated by actual arrival rather than customs declaration date) and subtracting 135,000 tonnes of exports (counted by departure date) and 200,000 tonnes of non-metallurgical applications, the effective supply for electrolytic aluminum production stood at 7.5445 million tonnes. With China’s electrolytic aluminum output reaching 3.7846 million tonnes in December and applying the industry-standard consumption rate of 1.93 tonnes of alumina per tonne of electrolytic aluminum, the market recorded a surplus of 240,200 tonnes for the month. This imbalance reflects the broader industry trend of supply outpacing demand, a result of capacity expansion outstripping growth in downstream electrolytic aluminum production constrained by the 45-million-tonne capacity ceiling policy .

Looking ahead to January 2026, the supply surplus is expected to persist albeit at a reduced scale. Baichuan Yingfu projects metallurgical-grade alumina production of 7.6 million tonnes, paired with anticipated imports of 249,000 tonnes and exports of 166,500 tonnes. Non-metallurgical consumption is estimated at 190,000 tonnes, while electrolytic aluminum output is forecast to rise slightly to 3.79 million tonnes. Using the 1.93-tonne consumption ratio, the projected surplus for January narrows to 177,800 tonnes. This modest improvement in balance is attributed to the expected production cuts and slightly higher electrolytic aluminum output, though it remains insufficient to reverse the market’s oversupplied condition.

The persistent alumina surplus carries significant implications for the entire aluminum value chain. For upstream producers, prolonged oversupply is likely to keep prices under pressure, accelerating the exit of high-cost, inefficient capacity and promoting industry consolidation . For downstream electrolytic aluminum smelters, stable and cost-effective alumina supply has supported healthy profit margins, which in turn benefits midstream and downstream processing sectors. As 2026 unfolds, the industry faces additional complexity from the planned commissioning of over 13 million tonnes of new alumina capacity, primarily in resource-rich coastal regions like Guangxi. While these new projects feature advanced, low-energy technologies, their concentrated release may exacerbate the supply surplus if demand growth remains constrained.

For aluminum processing enterprises specializing in sheets, bars, tubes, and custom machining, the stable alumina supply and controlled cost environment provide a favorable foundation for production planning and pricing strategies. The industry’s ongoing structural adjustment, driven by policy-guided capacity optimization and green transformation, is expected to enhance supply chain stability in the medium term. As the market navigates the dual pressures of existing surplus and new capacity additions, stakeholders across the value chain will closely monitor production adjustments and price trends to adapt to the evolving market landscape.