China's aluminium producers push abroad as domestic growth hits ceiling
XLB•Chinese investors have planned or announced at least 15 million metric tons a year of overseas aluminium smelting capacity. Morgan Stanley forecasts the global market will shift from a 1.1 million-ton deficit this year to an 830,000-ton surplus next year.
1. Overseas capacity plans
At least 15 million metric tons a year of primary aluminium smelting capacity is planned or announced by Chinese investors across Southeast Asia, the Middle East, Central Asia and Africa. About 2.85 million tons a year is under construction or ramping up, equal to 3.8% of current global annual capacity of 73.78 million tons.
2. Surplus forecast
Morgan Stanley forecasts the global aluminium market will move from a 1.1 million-ton deficit this year to an 830,000-ton surplus next year and a 1.8-million-ton surplus in 2028. It cut its average price forecasts to $2,850 a ton in 2027 and $2,800 in 2028, and expects an average of $3,150 in the second half of 2026.
3. Projects and oversight
Indonesia is a major destination, with Morgan Stanley expecting 866,000 tons of annual smelting capacity there in 2026 and another 1.2 million to 1.3 million tons in 2027. Chinese producers are looking abroad because domestic smelting capacity is capped at 45 million tons a year; new outbound investment rules and access to power could constrain projects. An industry consultant estimated that 9 million to 10 million tons of the identified capacity will ultimately be built.
