45.17 million tons of production capacity is approaching the upper limit! In-depth analysis of China's electrolytic aluminum supply pattern

一、Supply side: Guinea strongly recovers mining rights, China's production capacity is close to the ceiling

Late at night on May 15, local time, the Guinean government announced a major move. President Mamadi Doumbouya signed a decree to recover 51 mining concessions including bauxite, gold, diamonds, graphite and iron ore, which were "returned to the country free of charge". As the world's second largest bauxite producer, Guinea has bauxite reserves of about 7.4 billion tons, accounting for 24.7% of the world's total reserves. In 2023, its bauxite production was 97 million tons, accounting for 24.3%, second only to Australia. In 2024, Guinea's bauxite exports were about 146.4 million tons. Tom Price, head of commodities at investment bank Panmure Liberum, said that the Guinean government is increasing pressure on the bauxite industry, which may be intended to integrate the number of foreign bauxite miners and force the industry to invest in local downstream processing capabilities. For example, last week the Guinean government revoked the bauxite mining rights of Cable Energy and Emirates Global Aluminium because Cable Energy failed to raise enough funds for the alumina plant and Emirates Global Aluminium failed to fulfill its commitment to build an alumina refinery locally. ​

At the same time, as the world's largest aluminum producer, China's supply situation has also attracted much attention. As of March 2025, the domestic electrolytic aluminum production capacity has reached 45.17 million tons, approaching the policy ceiling of 45 million tons. In December 2024 and March 2025, the electrolytic aluminum production reached 3.77 million tons and 3.65 million tons respectively, with a capacity utilization rate of 98%. If there is no interference such as energy costs, China's electrolytic aluminum will maintain full production from 2025. From the monthly data, in February 2025 (28 days), the domestic electrolytic aluminum production was 3.347 million tons, a year-on-year increase of 0.4% and a month-on-month decrease of 9.5%. In March, the domestic electrolytic aluminum operating capacity rose again as related enterprises started production. At the end of March, the annualized operating capacity of domestic electrolytic aluminum remained at 43.84 million tons/year. By the end of April, the national electrolytic aluminum production capacity was 45.182 million tons, and the operating capacity was 44.089 million tons, an increase of only 45,000 tons from the previous month, with an operating rate of 97.6%, indicating that the domestic production capacity growth has been very limited.

二、Demand side: Demand differentiation in multiple industries, new energy becomes a highlight

In terms of demand, the demand for aluminum ingots in different industries shows a clear differentiation trend. In the traditional construction industry, aluminum demand has declined due to adjustments in the real estate market. Taking China as an example, the proportion of aluminum used in real estate has dropped from 29% in 2021 to 21%, and demand has decreased by about 5% year-on-year (about 1.5 million tons). In the packaging and consumer electronics industries, demand has remained relatively stable, with a growth rate of about 2%, contributing a total of about 500,000 tons of incremental growth. ​

However, the rise of the new energy industry has brought new growth momentum to the demand for aluminum ingots. In the field of new energy vehicles, with the increase in global demand for environmentally friendly travel, the production of new energy vehicles has grown rapidly. It is estimated that by 2025, China's new energy vehicle production will exceed 12 million vehicles, the amount of aluminum used per vehicle will reach 250kg, and the amount of aluminum used will increase to 3 million tons/year, accounting for 24% of aluminum used in transportation and 25%, and the demand will increase by 18% year-on-year. In terms of photovoltaics and energy storage, China's new installed capacity is expected to reach 250 million kilowatts, driving aluminum demand of 2.5 million tons; energy storage systems (such as battery pack shells) will have an additional demand of 500,000 tons. The UHV power grid field is also in strong demand, with 30,000 kilometers of new lines planned for 2025 and a 15% increase in aluminum cable demand (about 2 million tons). According to industry online data, the total output of my country's three major white appliances (air conditioners, refrigerators, and washing machines) reached 36.81 million units in April 2025, an increase of 16.6% compared with the same period last year. Among them, household air conditioners are scheduled to be produced in April. 22.19 million units, a year-on-year increase of 22.7%, also boosted aluminum demand to a certain extent. However, marginally, the production of photovoltaic modules in May is expected to be 55Gw, a month-on-month decrease of 10%, and the production of household appliances has increased year-on-year but weakened month-on-month. It is expected to drive aluminum consumption to weaken near the middle of the year, but it will still increase year-on-year.

三、Inventory and price: Inventory continues to be reduced, and prices fluctuate.

In terms of inventory, global aluminum ingot inventory shows a trend of continuous reduction. Domestic aluminum ingot social inventory continued to decline. As of May 15, it fell by 20,000 tons from Monday to 581,000 tons. Aluminum bar inventory fell by 14,500 tons from Monday to 138,200 tons. Bonded area aluminum inventory decreased by 4,500 tons to 111,800 tons from last Thursday. LME market aluminum inventory also decreased by 9,000 tons to 395,000 tons week-on-week. From a longer time period, on April 3, 2025, aluminum ingot inventory will be reduced by 32,000 tons to 774,000 tons, and aluminum bar inventory will be reduced by 11,000 tons to 250,500 tons.

In terms of price trend, aluminum ingot prices have fluctuated recently. In mid-April 2025, the price of aluminum ingots was 19718.3 yuan/ton, down 404.6 yuan/ton from the previous month, a drop of 2.0%. There has been a rebound recently. As of May 18, due to factors such as the easing of the Sino-US trade situation, the market has raised its expectations for domestic consumption growth, and aluminum prices have fluctuated and run strong. At present, the price of aluminum has rebounded to more than 20,000 yuan, but the widening basis has also slightly suppressed the enthusiasm of downstream pick-up by high prices. Previously, in the fourth quarter of 2024, the price of aluminum alloy ingots in North America fell by 14% month-on-month, and in Europe by 17%, reflecting the impact of global economic uncertainty, weakened downstream activities, and fluctuations in trade policies on the market. ​

On the whole, the global aluminum ingot market is in a critical adjustment period under the influence of multiple factors such as supply, demand and inventory. Supply-side changes such as the recovery of mining rights in Guinea and factors such as the growth in demand from the new energy industry will continue to affect the future direction of the aluminum ingot market. Market participants need to pay close attention to these developments to respond to potential market changes.