Alumina, as the basic raw material in primary aluminum smelting, is chiefly used to produce metallic aluminum through electrolysis. With bettering profitability since 2011, the large aluminum corporations around the globe have sped up capacity resumption and expansion successively. In H1 2011, global output of alumina reached 45.92 million tons, up 8.55% YoY, among which the alumina output in China registered 17.45 million tons, rising18.1% YoY, and a major engine for the rebounding of alumina output in the world.
The alumina is mainly consumed by downstream primary aluminum demands, i.e., the demand for metallurgical alumina. The market demand for metallurgical alumina globally has maintained steady growth as a whole in recent years except 2009 (a fall affected by financial crisis). In 2010, the apparent consumption of metallurgical alumina worldwide approximated 81.42 million tons, rising 8.2% from a year earlier, while in 2011, the figure increased by just 3.7% year-on-year to around 84.45 million tons under the backdrop of the recovering global capacity of primary aluminum as well as the growing demand for metallurgical alumina.
The alumina industry of characterizes the followings:
The industry features rather high regional and industrial concentration: In 2011, the total capacity of major electrolytic aluminum manufacturers shared more than 80% of overall capacity nationwide. The production of alumina in China mainly concentrates in Shandong, Henan, Guangxi, Shanxi, Guizhou, Chongqing, Inter Mongolia, etc., of which Shandong and Henan accounted for 33.9% and 25.7% respectively in 2011.
Oversupply will continue in the short term: The supply of alumina is still in excess presently, plus the electrolytic aluminum production reduction caused by power rationing, the demand for alumina will further decrease. Compared with electrolytic aluminum, alumina production requires less electricity, so the manufacturers producing both electrolytic aluminum and alumina prefer to shut down some electrolytic aluminum production lines but keep the production of alumina to the greatest extent. In this sense, the sharp fall in output of alumina is out of the question, and the decrease of supply will be limited.
The net import presents a downward tendency: China has been the net importer in the import & export trade of alumina in recent years, mainly due to the growing demand for alumina raw materials from electrolytic aluminum capacity expansion at home. Along with the continuous expansion of alumina capacity in China and drastic improvement of self-sufficiency in alumina market, the import demand of alumina has weakened obviously and the alumina import and export trade deficit in China has taken on a declining trend. In 2011, the import of alumina in China hit 1.88 million tons, down 56.38% from the previous year.
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