According to SMM statistics, China's aluminium production in February 2025 (28 days) increased by 0.4 per cent Y-o-Y but decreased by 95,000 tonnes M-o-M. The operating capacity of domestic aluminum increased M-o-M, mainly driven by the resumption of production at previously curtailed enterprises and the activation of replacement projects following the recovery of aluminum profits.
During the Chinese New Year holiday, many aluminum plants' casting ingot output fell short of expectations. Coupled with stable downstream purchases after the resumption of work and production, the proportion of liquid aluminum in the industry rose by 1.7 percentage points MoM and 6.7 percentage points Y-o-Y to 71.0 per cent. Based on SMM's liquid aluminum proportion data, domestic aluminum casting ingot production in February decreased by 18.4 per cent Y-o-Y to approximately 969,000 tonnes.
Capacity changes: As of the end of February, SMM statistics show that China's existing aluminum capacity was approximately 45.81 million tonnes, with operating capacity at around 43.64 million tonnes. The industry's operating rate increased by 0.07 percentage points M-o-M and 2.26 percentage points Y-o-Y to 95.3 per cent. Currently, domestic aluminum operating capacity is in a slight growth phase. Following the recovery of aluminium profits in February, several previously curtailed enterprises in Sichuan and Guangxi resumed production. Additionally, a replacement and upgrade project at an aluminum smelter in Qinghai commenced production, contributing to the growth momentum of aluminum operating capacity.
Production forecast: In March 2025, domestic aluminum operating capacity is expected to rise further as related enterprises activate and reach full production, with annualized operating capacity stabilizing at 43.84 million tonnes/year by the end of March. With the arrival of the "Golden March and Silver April" period, downstream operating rates are expected to rebound, and the new PV policy may stimulate a rush for installations, potentially driving growth in downstream aluminum demand. The proportion of liquid aluminum is expected to rise again to around 74 per cent in March. Further attention is needed on the resumption of aluminum capacity in various regions and the operating conditions of downstream sectors such as aluminum billets.
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