China is already home to more than 80 million tonnes of alumina capacity. So much so that the industry is struggling to source enough bauxite to satisfy demand.
So, it's not particularly good timing for new alumina refining capacity to enter the market, but that's exactly what's happening.
Markets change, of course, but built capacity rarely does. So perhaps the proprietors of new alumina capacity are hoping that the price will remain high but with better sources of ore coming their way.
The problem is that China has a capacity cap of 45 million tonnes on primary metal, which equates to almost 90 million tonnes of alumina. Right now, the Chinese are also supplying Russia, but that's not a sustainable market. Eventually, the war will end, and sanctions will finally be lifted.
However, the real tragedy is that China continues to add new alumina refining capacity based on fossil-fuel energy. Green alumina is the third piece of the puzzle, and with China's leading position in that sector, it's up to China to start making those conversions to existing plants... and building any new capacity on sustainable energy, not coal.
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