Speaking at an open internet conference, Mr. Yao Xizhi, Chief Analyst of Chalco International Trade revealed that China’s demand for alumina has declined significantly over recent years in light of the implementation of SSSR (supply side structure reform) policies. Restricted by a fixed amount of overall primary aluminium capacity, total domestic alumina capacity is likely to decline in the mid-long term. The operational rates of both domestic and global alumina refineries have been low in recent years with an estimate of future capacity growth slowing worldwide. Furthermore, domestic refineries in China face higher production costs than their peers in Australia, Brazil and India, so potential global alumina capacity growth is likely to be driven by countries outside of China.
Domestic primary aluminium smelters have seen their competitiveness increase in recent years. Growth of domestic primary aluminium capacity over the next two years is likely to occur in resource-rich areas with low electricity prices, such as Yunnan, IM and other areas with abundant hydropower and rich coal resources. Russia, India, Bahrain and other energy rich countries may contribute much in global primary aluminium capacity growth.