China’s aluminium production has risen from 4m tonnes in 2004 to 43m tonnes in 2024, accounting for 60% of global production. China’s growing dominance in the global aluminium supply chain has also faced some pushback, most recently from US tariffs.
None of these moves have stopped China’s exports of semi-finished aluminium products, which rose 19% to a record 6.2m tonnes last year. But that’s about to change. Beijing’s 2025-2027 aluminium “action plan” confirms that the capacity caps remain in place and lays out a strategy for their aftermath.
In the first quarter of 2025, China’s primary aluminium production rose 2.6% year-on-year, according to the International Aluminium Institute. China’s annual primary aluminium production averaged 44m tonnes in the January-March period, just 1m tonnes shy of the 45m tonne cap set in 2017.
China’s output is technically likely to exceed the cap, says consultancy AZ Global. China’s capacity utilisation is already very high, at 98.2%, so there’s little room for further increases. It is also clear that China’s production growth is slowing from an average annual rate of 4.0% over the past five years.
To offset slow or even stagnant growth in primary production, the Chinese government is seeking to stimulate scrap aluminum production, with the goal of increasing annual scrap recycling to more than 15 million tons by 2027.
Macquarie Bank analysts predict that China’s aluminum exports will fall by 8% in 2025, but countries outside China are heavily dependent on Chinese products, accounting for about 15% of total demand, so a more dramatic decline is unlikely. China’s slowing domestic production growth and reduced exports have opened a window of opportunity for other primary aluminum producers in the world. The United States has nearly 1 million tons of idle smelting capacity. U.S. President Trump has imposed a 25% import tariff on aluminum, aimed at stimulating the aluminum industry to resume work.
However, due to the lack of domestic expansion potential, Chinese aluminum producers are also going overseas. In fact, China’s aluminum action plan calls for closer cooperation with resource-rich countries such as Guinea, where Chinalco is involved in projects to convert bauxite resources into alumina.
