China's aluminum output surged to a record 42.7 million metric tons in 2025, driven by strong domestic demand and expanded smelting capacity, while steel production declined to 968 million tons, falling below the 1 billion ton threshold for the first time in a decade.
- Aluminum output rose to 42.7 million metric tons in 2025, a record high.
- Steel production declined to 968 million tons, below 1 billion for the first time since 2015.
- Domestic aluminum consumption reached 38.4 million tons in 2025.
- Exports of aluminum totaled 4.3 million tons in 2025.
- Global aluminum prices stabilized near $2,450 per metric ton.
- Steel sector faces restructuring due to overcapacity and declining demand.
China's aluminum sector achieved a new milestone in 2025, producing 42.7 million metric tons of primary aluminum—up 7.3% year-on-year and marking the highest annual output on record. This growth reflects continued investment in energy-efficient smelters and expanded output in western provinces such as Xinjiang and Yunnan, where hydropower and low-cost electricity have lowered production costs. The shift underscores a broader transformation in China's heavy industry, where aluminum is increasingly replacing steel in construction, automotive, and renewable energy applications. In contrast, steel production in 2025 totaled 968 million tons, the first time it has dropped below 1 billion since 2015, signaling sustained overcapacity concerns and a structural decline in traditional infrastructure-driven demand. The divergence between the two metals highlights differing market dynamics. Aluminum’s rise is supported by government incentives for lightweight materials in electric vehicles and green buildings, while steel faces headwinds from slowing urbanization and tighter environmental regulations. Domestic consumption of aluminum reached 38.4 million tons in 2025, with exports accounting for 4.3 million tons. Market participants are reassessing supply chains, with global aluminum prices stabilizing near $2,450 per metric ton as Chinese exports bolster international inventories. Steel producers, particularly in the northeast, are under pressure to restructure, with several state-owned enterprises announcing capacity reductions and pivot plans toward high-value specialty steels.