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AL CIRCLE

China’s aluminium trade contradiction: Export peaks but import grows, too!

EDITED BY : 7MINS READ

China’s aluminium story has always been a study in contradictions. On paper, the country dominates the industry. It produced nearly 43 million tonnes of primary aluminium in 2024, more than half the world’s supply. Yet in the same year, it imported over 3 million tonnes of primary aluminium, largely from Russia. Even more puzzling, China simultaneously exported about 6 million tonnes of semi-manufactured aluminium products, making it the world’s largest exporter of value-added aluminium.

This is an image of China world tradeImage source: https://www.omfif.org/

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Watch exclusively on AL Circle: Aluminium and Other Base Metals: Understanding Risk Management and Hedging by Jorge Eduardo Dyszel

The paradox raises pressing questions as to why the world’s biggest producer and consumer of aluminium needs to import. Why does it continue to export semi-finished goods instead of keeping them at home for its own industries? The answers lie in a mix of capacity caps, pricing dynamics, trade policy, and geopolitics.

Domestic supply at the ceiling, demand still rising

The first explanation is rather simple. Since 2021, Beijing has capped national primary aluminium capacity at 45 million tonnes per year, part of its pledge to control energy consumption and emissions. With smelting notoriously power-hungry, authorities have curbed unchecked expansion in provinces like Inner Mongolia and Xinjiang. By 2024, output had already climbed to 43 million tonnes, leaving little room for further growth without breaching the ceiling.

But demand is galloping ahead. Aluminium is the metal of China’s green transformation. Electric vehicles (EVs), high-speed rail, renewable energy infrastructure, and packaging are all aluminium-hungry sectors. China’s EV production surged past 9 million units in 2024, up 30 per cent year-on-year, each vehicle consuming approximately 250-400 kg of aluminium. Solar PV installations crossed 300 GW of new capacity in 2024, another aluminium-intensive sector in frames and cabling. Construction, still a backbone of domestic demand, absorbed millions of tonnes despite a shaky real estate market.

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EDITED BY : 7MINS READ

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