China’s aluminium output fuelled by Middle East’s stranded cargoes

[BEIJING] Chinese imports of the main raw material for aluminium jumped to a two-year high in March, as cargoes bound for smelters in the Middle East were rerouted to the world’s biggest producer.

The war in the Persian Gulf is driving more alumina to China, swelling the country’s surplus and keeping smelting margins elevated. Chinese aluminium output has surged as a result, and exports are soon expected to follow, a win for producers at a time when domestic stockpiles are building and the economy has slowed.

The near-total halt to shipping in the Strait of Hormuz has cut off alumina supplies to the Middle Eastern producers that account for 9 per cent of the world’s aluminium. That’s created a glut on the world market, with benchmark prices of alumina in Western Australia trading near five-year lows. China is already the world’s top producer and in recent years, has been exporting its excess.

Chinese alumina imports rose to 338,000 tonnes last month, an 87 per cent increase on February and nearly 30 times higher than the previous year, according to the latest data from customs. Net imports were 129,000 tons. Both are the highest since early 2024.

Inbound shipments should rise further in the coming months, as Middle Eastern smelters will take months to restart even after the war ends, said Liu Yang, an analyst with Beijing Aladdiny Zhongying Business Consulting.

Meanwhile, demand growth for aluminium in China is slowing, according to Bloomberg Intelligence. Even as new channels emerge – electric vehicles and artificial intelligence are to the fore – consumption is still being held back by a construction industry pummelled by China’s property crisis, analyst Michelle Leung said. BLOOMBERG