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China Alumina & Aluminum Outlook: Demand, output to rise further in 2021


96% of respondents see China's alumina demand rising

Half of respondents expect China's alumina prices to rise

All saw an increase in China's primary aluminum output

  • Author
  • Analyst Lucy Tang    Jia Hong Ong
  • Editor
  • Norazlina Jumaat
  • Commodity
  • Metals

Singapore — China's alumina and aluminum demand and output are expected to increase further in 2021, but an oversupply is likely to continue to weigh on domestic prices, according to S&P Global Platts outlook.

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A majority 96% of the respondents to the Platts outlook had expected China's alumina demand to continue to rise in 2021, thanks to the increase in demand from China's primary aluminum smelters.

Half of the market participants canvassed expected China's alumina prices in 2021 to be slightly higher than in 2020, while 46% were of the view that prices may be little changed.

Most respondents expected China's alumina prices to hover around Yuan 2,300/mt ($351/mt) this year, with some putting the high at Yuan 2,500/mt and the low at Yuan 2,200/mt.

New capacity coming online in and outside China will continue to weigh on domestic alumina prices, some sources estimated. Chinese alumina refiners were operating at low rates in 2020 and are expected to restart idled capacity once alumina prices improve.

The fate of imported alumina was mixed for 2021, with 29% of respondents expecting imports to increase and 25% saying they will remain largely unchanged from 2020. Some 38% were on the fence, highlighting that it would depend on prices as China would import more if seaborne prices were lower.


All the participants for the Platts outlook see China's primary aluminum output increasing in 2021, driven by high profit margins. Aluminum will remain profitable for Chinese smelters in the coming years as prices are expected to hover at prevailing highs, while alumina prices are unlikely to see any significant increase.

Some participants said China may experience an oversupply of primary aluminum in 2021 amid a high growth in production.

Most respondents took an optimistic view of domestic primary aluminum prices in 2021 and did not expect to see any sharp decline. Most expected prices to stay in the Yuan 14,000-17,000/mt range.

Some are of the opinion that average prices in 2021 may be higher than that of 2020 as the Chinese economy is expected to maintain positive growth, while other countries' stimulus policies along with the large-scale adoption of the COVID-19 vaccine will push aluminum demand up.

Around 46% of the respondents said that import arbitrage opportunities will remain viable in 2021, while 21% thought otherwise. Some were of the opinion that the window to arbitrage in 2021 may not always be open like 2020, adding that the price gap will start to narrow once domestic production picks up, driven by high profit margins and stronger seaborne prices as the global economy recovers.

Platts spoke with 24 companies, comprising producers, aluminum smelters, and domestic as well as international trading houses, for the outlook.