China alumina inflow hits two-year high amid global disruption

In March 2026, China's import of alumina, which is the essential raw material for aluminium production, reached a two-year high. The surge is mainly owed to the shipments, which were originally planned to reach the Middle East smelters, but changed the route to the world's largest producer.

As per the report shared by Bloomberg, the Persian Gulf conflict has nudged the redirection of alumina to China, which results in increased domestic surplus but also bolsters strong smelting margins.

Higher aluminium production in China

The rerouting of alumina into China has increased the country's aluminium production and the exports are also expected to follow the trend. This, however, offers much-needed relief to producers who are grappling with rising domestic inventories and a slowing economy.

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On the other hand, the shipping halt through the biggest channel, which is the Strait of Hormuz, has made it difficult for Middle Eastern producers to have easy access to alumina supply, which accounts for nearly 9 per cent of the world's aluminium production.

As a result, there is an oversupply in the global markets, where in Western Australia, the benchmark alumina prices are said to be reaching their lowest point in five years.

China's alumina imports

China, holding the position of the world's largest aluminium producer, as per the latest customs data, has imported 338 thousand tonnes of alumina last month, owing to a rise of 87 per cent from February and nearly a thirtyfold rise compared to the same time last year.

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The net import of the country reached 129 thousand tonnes, with both numbers hitting their highest points since early 2024. According to the data of SMM, China imported the most from Australia, holding the lion's share of 37.83 per cent, followed by Indonesia at 36.06 per cent, Vietnam at 15.11 per cent and India at 9.36 per cent. Other countries importing alumina from China include Japan, Germany, France, South Korea and others.

Due to this, according to Liu Yang, in the next month, it is expected that the inbound shipments will also continue to rise. This is mainly because the Middle East would require certain months to restart its operations even after the post-conflict period.

Rising demand in China

Noting Bloomberg's Intelligence, it is predicted that China is facing declining aluminium demand. Although there are new sources of demand rising in China, especially from sectors like electric vehicles and artificial intelligence, the overall consumption saw a dip because of the construction sector. This is mainly due to the effects of the ongoing property crisis, as noted by Michelle Leung.

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China’s role in supplying US solar projects

As pointed out by Doug Burgum, the US Interior Secretary, because China plays such a crucial role in providing materials for US solar projects, it is vital to implement stricter review processes. This shall aid in better anticipating any potential national security risks.

Natural gas: From Russia to China

China is set to receive natural gas from the Russian government in the next few years. Russia is offering this price at about one-third lower than what Europe is currently paying. This highlights that while Russia is shifting its focus to Asia, it is still recovering from the loss of its Western market.

Rising confidence in currency

This year, China may also allow its currency, that is, the Yuan, to rise to an all-time high. This is the decision made with the aim of boosting confidence in the currency as well as enhancing the overseas buying power of local businesses, as per Stephen Jen.

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