Indonesia bauxite demand to jump this year on alumina expansion

By Dominikus

Indonesia’s bauxite demand is projected to reach around 25 million tonnes in 2026, up from a previous estimate of about 20.9 million tonnes, driven mainly by the rapid expansion of the domestic alumina industry, Shanghai Metals Market said during a webinar on Thursday (February 5).

The outlook was presented by Jordan Janesputra, an aluminum and bauxite analyst at Shanghai Metals Market, who said realized bauxite demand in 2025 was estimated at around 15.4 million tonnes. On the supply side, output last year was estimated at about 18 million tonnes, with supply projected to rise slightly to around 18.5 million tonnes, pending an official decision from the government on the 2026 RKAB work plan approvals for bauxite mining.

“The commissioning of new alumina capacity in Indonesia is driving higher bauxite demand and narrowing the bauxite market surplus in 2025,” Janesputra said. “As additional alumina projects begin operations, demand growth is accelerating, and the market surplus is expected to continue easing, gradually moving toward a more balanced supply demand condition.”

Janesputra outlined three price scenarios depending on the outcome of RKAB approvals for 2026. If bauxite mining approvals are limited to 25 million tonnes, prices are estimated at around US$32 per tonne. If approvals reach 22 million tonnes, prices are expected to rise to about US$34 per tonne, while approvals of only 18 million tonnes could push prices to around US$36 per tonne.

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Indonesia currently has 78 operating bauxite mines, with total production reaching about 16.8 million tonnes in 2024. More than 80 percent of these mines are located in West Kalimantan province.

According to Janesputra’s presentation, Indonesia’s bauxite export ban has accelerated investment by Chinese companies in overseas alumina refineries. Based on Shanghai Metals Market research, Indonesia’s alumina capacity is expected to reach around 14.2 million tonnes in the future, supported by 10 projects that are already operating, under construction, or in the planning stage.

For 2026, Indonesia’s alumina supply is projected to reach about 8.54 million tonnes, up from an estimated 6.86 million tonnes in 2025. Data from the Indonesian Central Statistics Agency (BPS) showed that Indonesia’s total alumina exports in 2025 reached 5.429 million tonnes, up 22 percent year on year from 4.462 million tonnes in 2024. Alumina imports in 2025 stood at around 1.156 million tonnes, up about 5 percent from 1.101 million tonnes a year earlier.

“With a significant cost advantage in alumina production, Indonesia will maintain its position as a major alumina exporter,” Janesputra said.

Indonesia’s alumina production costs are projected to rise modestly from around US$225 per tonne in 2025 to about US$231 per tonne by 2030, reflecting a compound annual growth rate of around 0.5 percent, supported by a stable domestic bauxite supply and subsidized energy prices.

Editing by Reiner Simanjuntak