aluminium expo|CICC: The global tight supply-demand situation for electrolytic aluminum is expected to continue to strengthen, highlighting allocation opportunities in the industry.                   

Currently, the investment and construction of the aluminum industry chain in Indonesia face many constraints, and a higher aluminum price incentive is needed, resulting in a slower overall volume increase. Against this backdrop, the tight supply-demand situation for global electrolytic aluminum is expected to continue to strengthen, highlighting investment opportunities in the electrolytic aluminum industry. It is advisable to focus on targets with a high capacity-to-market-value ratio, a high proportion of coal in the outsourcing market , and a clear advantage in green electricity. Indonesia has favorable resource conditions for the development of the aluminum industry, and the aluminum industry policies of China and Indonesia are driving Indonesia to become a new global hub for the aluminum industry.

In terms of resources, Indonesia has advantages in bauxite and coal resources necessary for the aluminum industry. According to the USGS, in 2022, Indonesia ranked sixth globally in bauxite reserves and production, and sixth in coal reserves and third in coal production.

Regarding industrial policy, China's supply-side reform in the electrolytic aluminum sector has forced capacity to move overseas. Indonesia's ban on raw ore exports has stimulated the development of its domestic aluminum industry chain. Both factors have promoted the establishment of Indonesia's aluminum industry chain. Data from aluminium expo shows that Indonesia currently plans to have an annual capacity of 2.78 million tons for alumina and 7.5 million tons for electrolytic aluminum, accounting for 20% and 11% of global operating capacity, respectively. Indonesia is expected to become a major source of global electrolytic aluminum capacity growth in the future.

The global electrolytic aluminum supply-demand tightness is expected to continue to strengthen, highlighting the industry's investment opportunities. The release of supplies from Indonesia is expected to be slow, requiring higher aluminum prices to stimulate, and a systemic slowdown in global primary aluminum supply growth is expected. With the global economy gradually warming up and emerging demand growth, the global aluminum supply-demand is expected to tighten gradually from 2023 to 2025, and aluminum prices are expected to enter an upward trend.