Chinese producers understand that if they want to expand, they now have to go abroad.
Investment has primarily flowed into Indonesia, where new aluminium smelters can be sited in the same Chinese-built industrial parks used to process nickel.
Tsingshan Group, the powerhouse behind Indonesia's nickel boom, has teamed up with Chinese aluminium producers Huafon Group and Xinfa Group to build the new Hua Chin and Juwan smelters, respectively.
Existing power and logistics infrastructure has enabled rapid construction.
Hua Chin was commissioned last year with 480,000 tons of annual capacity. It applied in May to list its "HCAI" brand with the London Metal Exchange.
Juwan shipped its first aluminium to the U.S. in March. PT Alamtri Resources Indonesia ADRO.JK, in which China's Zhejiang Lygend Mining 2245.HK holds a minority interest, did the same in June.
Chinese aluminium smelter projects are also cropping up further afield.
In Kazakhstan, Xinfa is preparing a full-cycle industrial park with planned aluminium capacity of 2.4 million tons per year. Meanwhile, East Hope Group is working on a huge integrated project running from bauxite through alumina to aluminium.
In Angola, a Chinese consortium led by Hebei Huatong Wire and Cables Group 605196.SS is backing a new smelter in the Barra do Dande free-trade zone.
The first 120,000-ton phase was constructed using equipment transferred from China, likely from an older smelter that was sacrificed for a new one and as such an international application of Beijing's capacity-swap mandate.
The smelter's location on the Atlantic extends China's aluminium reach further into Western markets.
The country already accounts for around 60% of global production, a ratio that has crept up to 63% due to the loss of Gulf output in the Iran war.
The new generation of Chinese-backed smelters will cement that dominance as long as the West struggles to find a similarly sized response.
XLB•
