Chinese aluminium producers are planning a major expansion overseas, with at least 15 million tonnes a year of new primary smelting capacity announced or planned across Southeast Asia, the Middle East, Central Asia and Africa, ALCircle reported. About 2.85 million tonnes a year of that capacity is already under construction or being brought into operation, equal to 3.8 percent of current global annual smelting capacity of 73.78 million tonnes.
The driver is a hard ceiling at home. China’s domestic smelting capacity is capped at 45 million tonnes a year under a policy introduced in 2017 to curb overcapacity and pollution, and producers are operating close to it: the country produced 22.34 million tonnes in the first half of 2026, up 2.24 percent year on year, supported by high utilisation and relatively low alumina prices. With no legal room to add tonnes domestically, growth capital is going to jurisdictions with power, industrial parks and port access, with Indonesia the largest single destination.
The balance consequence is the market risk. Morgan Stanley forecast in July that the global market would move from a deficit of 1.1 million tonnes in 2026 to a surplus of 830,000 tonnes in 2027 and 1.8 million tonnes in 2028, as the new projects combine with recovering Middle East output. SMM’s own 2027 outlook reaches the same direction of travel, expecting ex China capacity commissioning to outrun demand growth and the supply demand pattern to shift from tight to loose, while noting that ex China commissioning plans were revised up sharply during 2026 and carry real delivery uncertainty.
Two qualifications keep the surplus case honest. Announced capacity is not financed capacity, and ALCircle noted tighter scrutiny from Beijing and concerns over project profitability may limit how much of the 15 million tonnes is actually built. And the strategic point cuts the other way for Western buyers: relocating smelters does not diversify ownership. If Chinese groups build and operate the new tonnes in Indonesia, Kazakhstan, Angola and Saudi Arabia, supply security for non Chinese consumers improves on geography while remaining exposed on control, which is the distinction that matters for critical minerals policy.