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Analysis of the Current Development Status of the Overseas Primary Aluminum Industry in 2017
2026-03-12
The growth rate of overseas aluminum production has slowed, with a clear trend toward relocation to developing regions. According to statistics, total overseas primary aluminum output in 2016 reached 28.793 million tonnes, reflecting a six-year compound annual growth rate of just 0.89%. Among these, North and South America experienced the sharpest declines due to challenges related to electricity supply and costs, with combined production falling by 647,000 tonnes between 2010 and 2016. By contrast, energy‑rich, lower‑cost regions such as Central and Eastern Europe and the Gulf states have been the main drivers of growth, adding 1.934 million tonnes over the same period.
Overseas electrolytic aluminum production growth is approaching zero (in 10,000 tonnes)
Data source: Public Data Compilation
According to statistics, since 2010, overseas electrolytic aluminum projects have collectively cut production by 5.7642 million tonnes, with a substantial reduction of 4.074 million tonnes between 2013 and 2015 due to the accelerated decline in aluminum prices.
In 2016, electrolytic aluminum consumption outside China grew steadily. In addition to the continued recovery in the construction sector, manufacturing—particularly the transportation industry—experienced rapid growth in aluminum demand, providing strong support for overall consumption. According to forecasts, the global aluminum market’s supply deficit is expected to widen from 1.3 million tonnes in 2017 to 1.7–1.8 million tonnes in 2018.
Manufacturing across the globe, excluding China, has fully rebounded.
Data Source: Compiled from publicly available sources.
With demand picking up, the resumption of electrolytic aluminum production has become inevitable, but its positive implications deserve even greater attention. Recently, Alumina and Rusal each announced plans to restart limited electrolytic aluminum capacity. We believe that, against the backdrop of recovering demand, a measured resumption of production is entirely normal—and it also signals that the world’s leading aluminum producers have reached a degree of consensus on the onset of a new cycle, which carries significant positive implications.
For the global aluminum industry, under the backdrop of sustained declines in aluminum prices, shedding high-cost capacity to flatten the cost curve and ensure survival has become a reluctant but necessary measure. According to our data, the four-year average aluminum price from 2013 to 2016 fell below $1,900 per tonne, with the 2016 average plunging even lower to $1,611 per tonne. At current price levels—around $1,900 per tonne—only projects that were shut down in 2016, along with some newly added capacity, are being brought back online.
Furthermore, scenario analysis indicates that even if aluminum prices were to rebound to their levels of previous years and previously idled electrolytic aluminum capacity were brought back online—assuming a 17% price increase to $2,100 per ton—the maximum additional supply entering the market would still be only around 4.81 million tons. Moreover, given the substantial costs of restarting operations and the permanent closure of many smelters, the actual incremental output would fall well short of 4.81 million tons. Against the backdrop of global electrolytic aluminum demand, which stands at roughly 60 million tons and grows annually by 5–8%, this would represent only a modest disruption.
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