Germany Aluminium Industry Decline Deepens as Energy Costs and CBAM Pressure Competitiveness

Germany Aluminium

Germany aluminium industry decline is becoming harder to reverse as production, recycling, and capacity utilization remain well below 2021 levels. Aluminium Deutschland said the sector showed no growth since 2021. Fourth-quarter output stayed only 76-88pc of 2021 levels. As a result, Germany aluminium industry decline now looks more structural than cyclical.

This matters because the sector is losing strength across several product categories at once. Rolled products rose slightly in 2025, but still remained 12pc below 2021 levels. Extruded products fell 1pc last year and stayed 24pc below 2021. Therefore, German aluminium competitiveness is weakening across both primary and semi-finished segments.

The association blames policy and cost pressure for the downturn. High energy prices, weak relief measures, and regulations such as CBAM are central concerns. The wider economy also remains soft. Consequently, Germany aluminium industry decline is being driven by both weak demand and a more difficult operating environment.

German Aluminium Competitiveness Is Under Pressure From Energy and Policy

German aluminium competitiveness is under direct pressure from high power costs and ineffective industrial support. Aluminium Deutschland said current policy frameworks no longer support recovery. It also warned that traditional policy thinking is failing domestic industry. As a result, the sector sees competitiveness risk as a core threat, not a temporary obstacle.

CBAM impact on aluminium is also becoming more controversial inside the industry. The association argues that CBAM may add burdens instead of meaningful protection. That concern is especially serious in a sector already facing cost disadvantages. Therefore, German aluminium competitiveness may weaken further if policy tools fail to deliver real relief.

This issue matters because aluminium is deeply tied to industrial employment and manufacturing resilience. If producers continue losing ground, Germany may become more dependent on imported metal and products. Meanwhile, the country could lose more industrial capacity in areas that support broader supply chains.

Aluminium Recycling in Germany Also Shows Industrial Weakness

Aluminium recycling in Germany is also moving in the wrong direction. German companies produced 2.7mn t of recycled aluminium in 2025. That was down 1pc on the year and 16pc below 2021 levels. As a result, the decline is not limited to primary production or semi-finished products.

Weak downstream demand is a major reason. Automotive, construction, and plant engineering all remained soft. Tight scrap availability and high scrap prices also hurt recycling economics. Therefore, aluminium recycling in Germany now reflects both industrial slowdown and raw material stress.

This matters because recycling should be one of Europe’s stronger advantages in aluminium. When recycling weakens alongside broader production, it signals a much deeper industrial problem. Consequently, Germany aluminium industry decline now extends across the full value chain rather than one isolated segment.

The Metalnomist Commentary

Germany’s aluminium sector is no longer describing a normal downturn. It is describing a competitiveness crisis. If energy costs, policy burdens, and weak demand continue together, Germany risks losing more than output. It risks losing strategic industrial capability.

New US Tariffs Could Significantly Impact European Aluminium Scrap Exports

Aluminium Scrap

European aluminium recycling faces challenges as US tariffs on scrap imports rise.

The recent announcement of new tariffs by the United States government, particularly on aluminium scrap from Europe, is sending ripples through the European aluminium recycling industry. The sweeping tariff adjustments, which were introduced by US President Donald Trump on April 2, threaten to significantly reduce the flow of European aluminium scrap to the US. With these new measures, aluminium scrap will face a substantial tariff, making it less attractive for US buyers.

Impact of New Tariffs on Aluminium Scrap Exports

The new tariffs, set to take effect on April 9, place aluminium scrap imports from Europe under a 20% tariff, while imports from the UK will face a slightly lower 10% tariff. This comes after the previously established 25% tariff on primary aluminium imports from Europe, which was put in place last month. As a result, the cost of importing aluminium scrap from Europe will be nearly as high as that for importing primary aluminium, significantly altering the economics of aluminium recycling.

Historically, the US had been a major buyer of European aluminium scrap, with many industries using recycled aluminium as an alternative to primary aluminium. The new tariffs, however, will likely make scrap imports much less appealing to US buyers, pushing them to explore other options. This comes after previous expectations that the US would turn to aluminium scrap as a more affordable alternative to primary aluminium, which is now burdened by hefty tariffs.

Reactions from Industry Associations

Industry associations such as European Aluminium and Aluminium Deutschland have voiced concerns over the new tariffs, as they undermine the viability of aluminium scrap exports. These associations had earlier called for export restrictions on scrap due to fears that large-scale shipments of aluminium scrap could exacerbate market imbalances. With the tariffs in place, the likelihood of scrap exports to the US is expected to diminish significantly.

European Aluminium has indicated that it is closely monitoring the situation to determine its next steps regarding export restrictions. Aluminium Deutschland, however, has yet to comment on the matter.

What This Means for the Aluminium Recycling Industry

These new tariffs could lead to a shift in the global aluminium market. If European aluminium scrap becomes less competitive due to high tariffs, it may force US buyers to seek out other sources of aluminium scrap, possibly from domestic markets or alternative suppliers. Additionally, this could put pressure on European recyclers, who may face reduced demand for their products, forcing them to explore new markets or adjust their pricing strategies.

As the situation evolves, the aluminium recycling industry in Europe will need to adapt to these new challenges, either by lobbying for changes in tariff policies or by finding ways to remain competitive in an increasingly restricted global market.

Chinese Aluminium Investment Shifts Focus to Overseas Production Facilities

Chinese Aluminium

Chinese aluminium investment is pivoting toward international markets as domestic production approaches government-imposed capacity limits. China produced 43.4 million tonnes of aluminium in 2024 and already possesses capacity to reach the government's production cap of 45 million tonnes per year. Therefore, any new Chinese aluminium investment will concentrate on facilities outside China rather than expanding domestic capacity.

Production Growth Slows in China While Global Expansion Accelerates

China's aluminium production growth will decelerate dramatically to approximately 0.4% compound annual growth rate over the medium term. This represents a significant shift from China's previous rapid expansion that outpaced global competitors. Meanwhile, Chinese aluminium investment will target strategic locations including Indonesia, Saudi Arabia, and Angola for new production facilities.

Indonesia emerges as the primary beneficiary of Chinese aluminium investment, with approximately 3 million tonnes of new annual capacity expected. The country has transformed from a bauxite supplier to China into a downstream aluminium producer. As a result, Indonesia's aluminium industry will receive substantial Chinese capital and technology transfer.

Secondary Aluminium Production Expands Despite Scrap Supply Constraints

Chinese secondary aluminium production will reach almost 30 million tonnes per year in 2025, doubling from 15 million tonnes five years ago. However, tight scrap supply continues to limit capacity utilization rates below 50% across the industry. This constraint affects the efficiency of Chinese aluminium investment in recycling infrastructure.

Ron Knapp, advisor to China Hongqiao Group chairman, emphasized that the production cap remains firm government policy. The cap prevents overcapacity issues similar to those experienced in China's steel industry. Therefore, Chinese companies must pursue aluminium investment opportunities in international markets to maintain growth trajectories.

Chinese aluminium demand growth will also moderate significantly in coming years. Primary aluminium consumption will increase by just 0.9% in 2025, falling to approximately 0.6% thereafter. Consequently, Chinese aluminium investment strategy focuses on securing global market share rather than serving domestic demand alone.

The Metalnomist Commentary

This strategic pivot reflects China's maturing aluminium sector and government commitment to sustainable industrial development through production caps. The shift toward overseas Chinese aluminium investment, particularly in resource-rich countries like Indonesia, will reshape global aluminium supply chains and create new competitive dynamics in international markets.

German Aluminium Output Rises Slightly, but Industry Urges Policy Support

German Aluminium Industry

Weak Demand and High Energy Prices Threaten Recovery

German aluminium output rises slightly in Q1 2025, marking the first production uptick after nearly three years of decline. According to industry association Aluminium Deutschland, recycled aluminium production increased 3% year-on-year to 703,000 tonnes, while semi-finished products edged up 1% to 576,000 tonnes. However, this growth appears fragile, with no underlying increase in demand and restocking cited as the main driver.

Rolled aluminium product output rose 2% to 456,000 tonnes, while extruded products fell 2% to 121,000 tonnes. This divergence indicates ongoing weakness in value-added segments. In 2024, Germany's aluminium sector had posted a 2% drop in recycled aluminium and a 3% decline in semi-finished products, underscoring the prolonged pressure on producers. Therefore, although German aluminium output rises slightly, the sector remains far from full recovery.

Aluminium Deutschland president Rob van Gils warned that the rebound is not demand-driven and emphasized the need for lower energy prices and clear investment frameworks. The call comes as Germany transitions to a new coalition government following political instability earlier this year. Without structural policy support, Germany risks entering 2025 as a stagnant industrial economy. The aluminium sector is demanding urgent reforms to avoid becoming Europe’s next manufacturing casualty.

The Metalnomist Commentary

Germany’s modest aluminium output growth reflects restocking activity, not industrial recovery. Without energy price reform and investor confidence, the nation’s aluminium sector could slide further—despite its technological strength and recycling capacity.

Rising Aluminium Prices Seen Unlikely to Derail Demand Growth

Aluminium

Rising aluminium prices are unlikely to destroy demand, despite higher premiums caused by Middle East supply disruption and the effective closure of the Strait of Hormuz. Speakers at an aluminium industry event in London said the sector’s medium-term demand drivers remain strong.

Rising aluminium prices have raised concerns among analysts that buyers could reduce consumption or switch to alternative materials. Those fears have grown as supply disruption has lifted global delivery premiums and tightened availability.

Rising aluminium prices are still being weighed against structural demand from packaging, automotive lightweighting, power infrastructure, energy transition projects and artificial intelligence-related growth. Industry speakers argued that these end-use trends are not easily reversed by short-term price movements.

The debate matters because aluminium demand forecasts remain strong. Consensus expectations have pointed to demand growth of around 40% in 2022-30, while newer forecasts suggest growth of about 5% per year over the next decade.

Packaging and Automotive Demand Look More Resilient Than Expected

Packaging demand appears relatively insulated from short-term aluminium price moves. Alcoa said it is seeing more products move into aluminium cans and that price is not the main factor driving packaging substitution.

This is important because beverage cans and packaging remain high-volume aluminium markets. Their appeal is tied not only to cost, but also to recyclability, light weight, consumer preference and established filling infrastructure.

Automotive demand is more price-sensitive. However, major material choices in vehicle platforms are not usually changed because of short-term price movements.

Automakers make aluminium decisions around lightweighting, crash performance, emissions rules, platform design and long-term supply strategy. This gives aluminium some demand stability even when prices and premiums rise.

Still, demand destruction cannot be ruled out completely. High interest rates, weak consumer purchasing power and elevated living costs may continue to limit consumption in some traditional markets.

Copper Prices Strengthen Aluminium’s Role in Electrification

Energy transition and AI infrastructure demand give aluminium a stronger long-term floor. These sectors require large volumes of conductive, lightweight and scalable material.

Copper remains the main competing material in electrical and cable applications. But copper prices are now so high that some buyers are more likely to consider substituting copper with aluminium than the reverse.

This strengthens aluminium’s position in power cables, grids, renewable energy, data centres and related infrastructure. Aluminium offers good conductivity, lower weight and more transparent supply-chain options in some applications.

The energy transition also supports demand through decarbonisation. Solar, wind, transmission systems, electric vehicles, battery enclosures and industrial electrification all require more aluminium.

AI infrastructure adds another layer. Data centres need power distribution, cooling systems, structural materials and electrical infrastructure, all of which can support aluminium use.

Therefore, the demand question is not only about price. It is about whether the world can build enough power, transport and digital infrastructure. Aluminium remains one of the core materials for that buildout.

The Metalnomist Commentary

The aluminium market is showing that strategic demand can absorb higher prices better than traditional models suggest. The real risk is not immediate demand destruction, but whether supply disruption, premiums and energy costs create uneven pressure across weaker end-use sectors.

India Aluminium BIS Certification Raises Quality Bar for Domestic Supply

BIS

India aluminium BIS certification is becoming a formal market requirement as the government enforces the aluminium and aluminium alloy products Quality Control Order 2026. The order mandates Bureau of Indian Standards certification for a wide range of aluminium products sold in the domestic market.

The regulation took effect on 11 March 2026 and replaces the earlier 2025 order. The Ministry of Commerce and Industry introduced the measure to improve product quality, strengthen consumer safety, and standardise aluminium products across India’s industrial supply chain.

India aluminium BIS certification will apply to products such as rods, bars, sheets, and composite panels. These materials are used across infrastructure, engineering, electrical equipment, packaging, aerospace, and household applications, making the order significant for both producers and downstream manufacturers.

Aluminium Producers Face New Compliance Timelines

Manufacturers must now secure a valid BIS licence before selling covered aluminium products in India. Certification will follow Scheme-I of Schedule II under the BIS regulations, 2018, which requires compliance with relevant Indian Standards and testing procedures.

The government has introduced phased deadlines to reduce disruption across different enterprise sizes. Critical aluminium products face immediate compliance, while general engineering aluminium products will follow a staggered schedule.

Large enterprises must comply by 1 December 2026. Small enterprises will have until 1 March 2027, while micro enterprises must comply by 1 June 2027. This phased structure gives smaller manufacturers more time to adapt their testing, documentation, and quality control systems.

Quality Control Order Reshapes India’s Aluminium Market

India aluminium BIS certification will likely raise the entry barrier for low-quality or inconsistent aluminium products. This could support more disciplined domestic production and reduce the circulation of non-standard material in key industrial sectors.

The order also has trade and procurement implications. Importers and domestic suppliers will need to align product specifications with Indian Standards before selling into the local market. However, exemptions remain for exports and research activities.

The R&D exemption allows up to 200kg of annual imports without BIS certification, provided the material is not sold and is later disposed of as scrap. This gives laboratories, universities, and product development teams limited flexibility while keeping commercial sales under the certification framework.

For India’s aluminium industry, the order signals a stronger policy focus on quality, traceability, and industrial standardisation. As demand grows from infrastructure, power equipment, packaging, aerospace, and manufacturing, certified aluminium supply will become more important for competitiveness and reliability.

The Metalnomist Commentary

India’s aluminium Quality Control Order is not just a standards update. It is a market-filtering mechanism that could reward compliant producers and pressure weaker suppliers out of higher-value industrial channels.

CBA Aluminium Sale Clears Brazil Antitrust Review as Chalco and Rio Tinto Gain Control

CBA

CBA aluminium sale has cleared Brazil’s antitrust review after Cade approved the transaction with no restrictions. The decision allows China’s Aluminum Corporation, Chalco, and Rio Tinto to move closer to closing their acquisition of a 68.6% controlling stake in Brazilian aluminium producer CBA.

The CBA aluminium sale is strategically important because CBA is Brazil’s last remaining domestic aluminium producer. The company became especially significant after Vale sold its aluminium assets to Hydro in 2016, leaving CBA as the country’s main integrated aluminium platform.

The deal is valued at R4.69 billion, or about $900 million. Chalco and Rio Tinto also plan a tender offer to jointly acquire the remaining shares. Cade’s approval removes the last major regulatory hurdle before closing.

Integrated Aluminium Assets Give the Deal Industrial Weight

CBA operates across the full aluminium value chain. Its platform includes bauxite mining, alumina refining, primary aluminium smelting, downstream processing, recycled aluminium production, and associated power supply.

This integrated structure gives the transaction more strategic value than a simple equity acquisition. Chalco and Rio Tinto are gaining exposure to upstream raw materials, refining capacity, smelting assets, fabrication capability, and recycling operations in one company.

CBA currently operates three producing bauxite mines with combined output of about 2mn t/yr. It also has 800,000 t/yr of alumina capacity, 430,000 t/yr of primary aluminium smelting capacity, and 215,000 t/yr of downstream processing capacity.

Brazil’s Aluminium Chain Enters a New Ownership Phase

The CBA aluminium sale could reshape Brazil’s aluminium industry by bringing two major global players deeper into the country’s industrial base. Chalco adds Chinese aluminium scale and market reach, while Rio Tinto brings global mining and aluminium experience.

Brazil’s development bank Bndes has also approved R715.9mn in funding to upgrade an aluminium production unit in São Paulo. That support suggests Brazil still sees aluminium as an industrial priority, even as ownership becomes more international.

For Brazil, the key issue will be whether the new ownership structure strengthens local production, investment, and downstream competitiveness. For global aluminium markets, the transaction reinforces the value of integrated assets at a time when bauxite, alumina, power, recycling, and low-carbon production routes are becoming increasingly strategic.

The Metalnomist Commentary

The CBA transaction shows that integrated aluminium assets remain highly valuable in a fragmented global supply chain. Brazil keeps the industrial base, but future competitiveness will depend on whether new ownership turns scale into investment, modernization, and stronger downstream capacity.

Aluminium on UK critical minerals list reshapes Britain’s strategy

Alfed(UK)

Aluminium on UK critical minerals list marks a major policy shift for Britain. The UK government will classify aluminium as both a critical and a growth material. This move recognises aluminium’s central role in economic resilience and low carbon manufacturing. Therefore aluminium on UK critical minerals list signals that supply security now sits alongside climate and industrial goals.

Why aluminium on UK critical minerals list matters for industry

Aluminium’s inclusion in the UK Critical Minerals Strategy strengthens its position across automotive, construction and energy transition value chains. The metal underpins everything from electric vehicles and lightweight structures to power grid upgrades and packaging. As a result, policy makers now treat aluminium supply disruption as a systemic economic risk.

This recognition should support new investment in recycling, low carbon smelting and domestic processing capacity. However, investors will still demand clarity on planning rules, power prices and long term demand signals. Aluminium on UK critical minerals list can unlock funding only if the broader policy framework stays predictable and supportive.

The UK also gains strategic alignment with allies that have already elevated aluminium to critical status. Nato’s classification of aluminium as a defence critical raw material underscores its role in aircraft, missiles and armoured systems. Consequently, the UK must manage aluminium supply with both industrial competitiveness and defence readiness in mind.

Defence demand and the UK Aluminium Alliance response

Defence and aerospace demand give additional weight to aluminium on UK critical minerals list. Lightweight yet strong alloys are essential for modern airframes, space systems and advanced weapons platforms. Therefore, secure access to primary metal and high performance alloys becomes a core national security issue.

Industry group Alfed is positioning the sector to respond to this new priority status. Its UK Aluminium Alliance platform aims to channel investment, shape regulation and accelerate policy reform. Meanwhile, the Alliance can help coordinate messages on energy costs, trade defence and sustainability metrics.

For UK producers and processors, the combination of critical and growth designation creates both opportunity and pressure. Companies will need to prove that their projects enhance resilience, cut emissions and support regional jobs. In return, they can argue for targeted support on infrastructure, innovation and skills development.

The Metalnomist Commentary

Aluminium’s elevation inside the UK Critical Minerals Strategy confirms that base metals now sit at the heart of security policy. The challenge will be translating this label into coherent action on power pricing, recycling and strategic stockpiles. If the UK aligns industrial policy with this new status, aluminium could become a flagship test case for integrated climate and security planning.

EU aluminium scrap export restriction moves toward spring 2026 adoption

EU aluminium scrap

The European Commission launched work on an EU aluminium scrap export restriction to curb “scrap leakage.” Maroš Šefčovič said the measure should arrive in spring 2026. The EU aluminium scrap export restriction aims to secure feedstock for recyclers and downstream producers.

European industry groups have pushed for action for years. However, the pressure intensified after Donald Trump imposed tariffs on primary aluminium imports. Many buyers may shift toward more scrap to reduce duty exposure. Therefore, European exporters could see stronger pull from overseas markets.

Aluminium scrap flows already show the scale of the challenge. The European Union and the United Kingdom exported around 1.6mn tonnes of aluminium scrap in 2024. That volume rose almost 25% versus 2022 and about 60% versus 2019. As a result, policymakers now frame scrap retention as an economic security issue.

Export tariffs or quotas look more likely than a ban

The final instrument is not yet defined. Officials and industry leaders say a full ban is unlikely. However, export tariffs or quotas could deliver immediate friction on outbound scrap.

Industry executives welcomed the signal from Brussels. Hydro extrusions head Paul Warton called the move encouraging. Meanwhile, European Aluminium director-general Paul Voss described current outflows as a market failure. Therefore, the consultation phase will test where the market sees real bottlenecks.

The commission will run a public consultation and gather evidence. That process will shape how any tariffs or quotas apply. Meanwhile, Aluminium Deutschland has also argued for tools that keep scrap in Europe. As a result, the EU aluminium scrap export restriction will likely focus on volumes and verification.

Scrap retention supports low-carbon aluminium and industrial resilience

Scrap retention directly supports lower-carbon aluminium production. Recyclers typically cut energy use versus primary routes, depending on power mix. Therefore, stable scrap supply improves decarbonisation pathways for European manufacturers.

Trade measures could also reshape pricing and contracts. Scrap exporters may face lower netbacks, while domestic buyers may gain supply security. However, overly strict rules could disrupt collection incentives and cross-border trade. As a result, policymakers must balance supply security with healthy recycling economics.

The Metalnomist Commentary

Europe will not decarbonise aluminium without reliable scrap access at scale. Meanwhile, tariffs and quotas must avoid weakening collection and sorting investment. Therefore, the best design links any restriction to reinvestment in recycling capacity.

European Aluminium Calls for EU Scrap Export Limits

European Aluminium Scrap

Aluminium industry group urges EU action to protect regional scrap supply amid rising export demand and U.S. tariff pressure

Rising Exports and U.S. Tariffs Put Pressure on EU Scrap Supply

European Aluminium has urged the EU to implement export limits on aluminium scrap. This follows increased competition from Asian markets and new U.S. trade measures. In 2024, the EU exported 1.5mn tonnes of aluminium scrap, with over 500,000t going to India alone. Meanwhile, U.S. buyers are now expected to shift toward scrap after Washington imposed a 25% tariff on primary aluminium.

Industry Pushes for Regulation Through the WSR and Circular Economy Act

The association proposed using export fees and tightening the Waste Shipment Regulation (WSR). This 2023 revision now includes scrap metal, offering a legal pathway for restrictions. European Aluminium also called for a new Circular Economy Act to ensure long-term scrap availability and quality. Furthermore, it recommends a dedicated emissions benchmark for recyclers.

Scrap Now Central to Primary Production and Green Goals

Sustainability targets have pushed primary aluminium producers to use more scrap. Improved technologies also enable the use of lower-grade material. As a result, competition for European scrap has intensified. German trade body Aluminium Deutschland previously appealed to its government for similar EU-wide restrictions.

The Metalnomist Commentary

Aluminium scrap is no longer a marginal byproduct—it’s become a strategic resource. With decarbonization and tariffs converging, Europe faces a policy choice: export profits or internal supply security. The latest moves by industry groups show momentum for regulatory intervention.

Aluminium Supply Shock Gives Metal a Firmer Floor Than Copper

Aluminium

Aluminium supply shock from the US/Israel-Iran war has given the metal a firmer price floor than copper, according to speakers at the FT Commodities Global Summit. The market is facing a direct physical shortage caused by smelter shutdowns, feedstock disruption and tighter value-added product flows.

Aluminium supply shock is already visible in European markets, where value-added product shipments have tightened sharply because of disrupted Middle East flows. Panellists described aluminium restrictions as the clearest metals impact of the conflict.

Aluminium supply shock differs from copper’s current tightness. Copper is being supported by policy positioning, strategic stockpiling, AI-related demand and long-term grid investment. Aluminium, by contrast, has already lost physical tonnes.

The market has reportedly lost 2mn-3mn t of aluminium production. That loss gives aluminium less downside risk than copper in a weaker macroeconomic environment because the shortage is physical, not only financial or policy-driven.

Missing Aluminium Tonnes Tighten Western Product Markets

Western smelters and semi-fabrication assets are seeing stronger demand for metal, especially higher-value products. But producers have little spare capacity left to respond.

Rio Tinto said all of its smelters producing value-added products are running flat out. This means western producers cannot quickly replace missing Middle East supply.

The shortage has already redirected Pacific metal toward Europe. It has also pushed Japanese aluminium premiums to historical highs, showing how regional trade flows are being reshaped by the supply shock.

Value-added aluminium products are especially exposed. These products serve packaging, automotive, aerospace, construction, electrical and industrial markets. When shipments tighten, downstream users feel the impact faster than in bulk commodity markets.

Aluminium’s downside is therefore limited by immediate supply loss. Even if demand weakens, missing smelter output and thin inventories can keep prices supported.

Copper’s bullish case remains powerful, but it is more indirect. It depends on electrification, data centres, policy stockpiling and supply-chain positioning. Aluminium’s case is simpler: the market needs metal that is not currently available.

China Cap and Western Capacity Limits Raise Policy Risk

The aluminium market cannot respond quickly to the disruption. China cannot easily replace the shortfall because of its 45mn t/yr production cap.

The cap has become a major structural feature of the global market. It has helped keep China’s aluminium industry profitable by preventing destructive overcapacity, but it also limits global supply flexibility during shocks.

The US and Europe also have limited restart options. High power costs, ageing assets and weak smelting economics mean there is little idle capacity that can return quickly and economically.

This makes aluminium increasingly policy-sensitive. Chinese and Indonesian producers still hold influence over future supply through capacity decisions, energy policy, exports and industrial planning.

Copper may remain the stronger long-term demand story because of grids, AI infrastructure and electrification. But aluminium has the more immediate supply problem.

For industrial buyers, the key issue is not only price. It is availability of qualified metal and value-added products. This is especially important for manufacturers that cannot easily switch suppliers or specifications.

The Metalnomist Commentary

Aluminium’s current strength comes from missing physical supply, not just bullish sentiment. Copper may win the long-term electrification story, but aluminium has the tighter near-term setup because replacement capacity is scarce and inventories are thin.

European Aluminium Renews Call for Aluminium Scrap Export Restrictions

European Aluminium Scrap

US Tariff Hike Intensifies Scrap Supply Pressures in Europe

European Aluminium has renewed its push for export restrictions on aluminium scrap following US president Donald Trump’s decision to double tariffs on EU steel and aluminium imports to 50%. The association warns that the move could accelerate scrap outflows to the US, worsening an already tight supply situation in Europe.

The industry group first raised the proposal in 2018 when the US imposed a 25% tariff on all steel and aluminium imports. Scrap aluminium was excluded from the sanctions, making it an attractive alternative for US buyers seeking to avoid higher costs on primary aluminium. With the latest tariff hike, European Aluminium says the outflow has intensified, threatening domestic recycling and semi-fabrication operations.

Rising Global Demand for Aluminium Scrap Fuels Competition

Strong demand from buyers in India and other Asian markets has already strained European scrap supply. These buyers offer higher prices, benefiting from lower labour and energy costs and weaker environmental regulations. Additionally, primary aluminium producers in Europe are increasingly using higher-grade scrap to meet automotive customers’ sustainability goals.

European Aluminium reported that scrap exports to the US surged 273% year-on-year in the first quarter of 2025, already accounting for two-thirds of total exports in 2024. Without swift EU intervention, the association warns that the situation could escalate into a “full-blown scrap crisis,” jeopardizing the viability of Europe’s aluminium recycling and semi-fabrication industry.

The Metalnomist Commentary

The surge in US demand for European aluminium scrap highlights the vulnerability of supply chains to trade policy shifts. For the EU, balancing open trade with the need to safeguard strategic raw materials will be critical. Without targeted restrictions or incentives to retain scrap domestically, Europe risks undermining its own circular economy and low-carbon manufacturing goals.

Bosai Indonesia Aluminium Smelting Project Signals China’s Next Overseas Capacity Push

Bosai

Bosai Indonesia aluminium smelting project shows how Chinese producers are extending primary metal capacity beyond domestic limits. The company signed an agreement to prepare industrial land in East Java. Initial committed investment totals $1.5bn, although planned capacity remains undisclosed. As a result, the market sees strategy first and production detail later.

The project matters because China’s aluminium industry is moving outward with greater urgency. Beijing’s 45mn t/yr ceiling limits domestic primary aluminium growth. Therefore, Chinese aluminium overseas expansion has become a structural response, not a short-term option. Indonesia remains one of the clearest destinations for that strategy.

East Java Aluminium Project Prioritises Infrastructure Over Raw Material Proximity

East Java aluminium project development appears to favour operating stability over raw material location. The province lacks major bauxite resources, which could raise feedstock logistics costs. However, it offers stronger infrastructure than many mining-centered regions. Stable power, port access, and road links can support long-term smelter performance.

That trade-off is increasingly common in aluminium investment decisions. Smelters depend heavily on electricity reliability and transport efficiency. Therefore, infrastructure quality can outweigh direct proximity to ore in some project models. Bosai seems to be betting that East Java can deliver that advantage.

The project also fits a wider pattern across Indonesia’s aluminium sector. Nanshan is expanding capacity at Bintan Industrial Park. Meanwhile, Hua Chin Aluminum Indonesia commissioned a 500,000 t/yr smelter in 2025. Consequently, Indonesia aluminium smelting is becoming a more important outlet for Chinese capital.

Chinese Aluminium Overseas Expansion Is Building a New Regional Supply Map

Chinese aluminium overseas expansion is reshaping where new capacity gets built. Bosai’s move suggests another step in that regional realignment. Instead of waiting for domestic room, producers are securing offshore industrial platforms. As a result, Southeast Asia is gaining more weight in the aluminium supply chain.

Bosai Indonesia aluminium smelting project may also carry broader industrial effects beyond metal tonnage. Local officials said the development could create more than 7,000 jobs. They also linked it to growth in the regional circular economy. That language suggests policymakers want downstream industrial clustering, not only one standalone plant.

For the aluminium market, the main question is execution quality. Capacity announcements alone do not guarantee competitive output. Power cost, alumina sourcing, logistics discipline, and commissioning speed will determine project value. Therefore, Bosai Indonesia aluminium smelting project deserves attention even before final scale is revealed.

The Metalnomist Commentary

Bosai’s move shows that aluminium competition now depends on geography as much as scale. The real winners will be producers that pair capital with stable infrastructure and efficient supply routes. If Indonesia keeps attracting these projects, it could become a much stronger node in Asia’s aluminium map.

Wanji Aluminium Smelter Starts Construction in Xinjiang With Green Power Focus

Wanji Aluminium

Wanji aluminium smelter construction has started in China’s Xinjiang region, marking another step in the country’s shift toward larger, more energy-efficient primary aluminium capacity. The 580,000 t/yr project will require total investment of 4.6bn yuan, or about $667 million.

The Wanji aluminium smelter will use Xinjiang’s clean energy resources, including integrated wind and solar power. This gives the project a lower-carbon positioning at a time when electricity source, power cost, and emissions intensity are becoming central to aluminium competitiveness.

Wanji aluminium smelter development also follows China’s capacity replacement policy. The company currently operates a 580,000 t/yr smelter in Luoyang, Henan province, which is scheduled to be demolished by December 2027 after the Xinjiang capacity is completed.

Xinjiang Project Targets High-Efficiency Aluminium Production

The Xinjiang smelter will use 600kA large-scale electrolytic cells, which Wanji described as the world’s most efficient technology. The project will also adopt advanced process systems to reduce energy use and improve operating performance.

Power consumption is expected to be as low as 12,430 kWh/t of aluminium. That level would place the facility among the world’s most energy-efficient aluminium smelting operations.

This matters because aluminium smelting is one of the most electricity-intensive industrial processes. Producers with access to low-cost renewable power and efficient electrolytic cells can gain a structural advantage over older smelters exposed to coal power, higher tariffs, or carbon costs.

Capacity Replacement Supports China’s Aluminium Upgrade Strategy

The project is moving forward in line with Wanji’s capacity replacement plan released in August 2025. China has encouraged aluminium producers to upgrade electrolytic baths and shift more production toward greener energy sources.

The replacement of Wanji’s Luoyang smelter with the Xinjiang facility shows how China is reshaping its aluminium industry. The strategy is not only about adding volume, but replacing older capacity with larger, cleaner, and more power-efficient assets.

Wanji also plans to build the Xinjiang site into a fuller industrial chain, covering alumina through processed aluminium products. This could strengthen value integration and support downstream aluminium fabrication in the region.

The Metalnomist Commentary

Wanji’s Xinjiang project shows how China is combining capacity replacement, renewable power, and high-efficiency smelting technology to strengthen aluminium competitiveness. The key global implication is clear: low-carbon aluminium will increasingly depend on power strategy as much as smelter scale.

European Aluminium Industry Pushes for Scrap Export Restrictions

Al scrap

Rising Pressure for Scrap Export Controls

The European aluminium scrap market is facing mounting pressure as supply tightness collides with strong export demand. Industry groups such as European Aluminium and Aluminium Deutschland have intensified lobbying for export tariffs to secure domestic scrap supply. Their push comes as the US raises tariffs on primary aluminium imports, potentially boosting American demand for European scrap.

Exports of European aluminium scrap surged in recent years, particularly to Asia. The EU and UK together shipped 1.57mn tonnes in 2024, a 23pc increase compared with 2022. India and China accounted for the bulk of these flows, while exports to the US, though smaller, grew sharply. European Aluminium warned that rising US interest, combined with current supply shortages, risks creating a “full-blown scrap crisis.”

Industry Debate and Market Risks

However, not all stakeholders agree that restrictions are the solution. Scrap merchants argue that supply shortfalls are driven more by weak industrial activity than by exports. Low production in automotive, construction, and machinery has reduced available grades like aluminium turnings, which are essential for European secondary smelters. They caution that tariffs may not address these structural issues and could trigger reciprocal trade barriers, complicating Europe’s own scrap imports.

At the same time, many producers identify high energy costs as the bigger threat to smelter viability. Merchants note that no smelter closures have been directly tied to scrap shortages, while escalating electricity prices have forced cutbacks. Despite this, calls for restrictions continue to gain traction, reflecting a broader trend of resource nationalism as countries prioritize domestic recycling over exports.

The Metalnomist Commentary

The debate over aluminium scrap export restrictions underscores a critical tension between free trade and industrial security. While tariffs may stabilize domestic availability, they risk distorting markets and inviting retaliation. The EU must weigh these risks carefully, especially as global competition for low-carbon feedstock intensifies. Energy costs, more than scrap scarcity, remain the sector’s existential challenge.

Australia Pledges $1.24 Billion to Support Green Aluminium Transition

Australia Aluminium

Government Incentives to Drive Low-Carbon Aluminium Production

Australia has announced a A$2 billion ($1.24 billion) production credit program to help aluminium smelters transition to renewable energy over the next decade. This initiative aligns with the country's broader goal of sourcing 82% of its power from renewable sources by 2030, up from approximately 40% today. The government has committed A$40 billion in total to support this transition.

The plan will provide financial incentives per tonne of low-carbon aluminium produced, encouraging smelters to invest in clean energy solutions. This move strengthens Australia's position as a key player in the global aluminium market, which increasingly demands low-emission metals for industries such as electric vehicles, aerospace, and construction.

Rio Tinto and Industry Leaders Back the Initiative

The announcement has received strong support from Rio Tinto, one of the world's largest aluminium producers. The UK-Australian mining giant stated that the initiative will "help sustain and grow aluminium smelting in Australia." This follows Rio Tinto’s existing partnership with the Queensland state government to transition its Boyne smelter to renewable energy sources.

Additionally, industry groups such as the Australian Aluminium Council and the Australian Conservation Council have welcomed the program. They believe it will attract private investment, enhance global competitiveness, and position Australia as a leader in sustainable aluminium production.

Concerns Over Renewable Energy Supply

However, the Australian opposition leader, Liberal Party head Peter Dutton, has expressed skepticism. He argues that Australia lacks sufficient renewable energy to power all its aluminium smelters. Critics also warn that the shift could lead to higher electricity prices, potentially affecting industry profitability and consumer costs.

Despite these concerns, the government remains committed to supporting green industrial transformation, ensuring Australia’s aluminium sector remains globally competitive while aligning with climate targets.

Germany Pushes EU to Impose Aluminium Scrap Export Tariffs

Aluminum Scrap

Rising US demand sparks supply concerns and threatens Europe’s circular economy framework

Aluminium Deutschland Warns of Scrap Outflow Risk

Germany's aluminium industry group, Aluminium Deutschland, has urged the EU to impose aluminium scrap export tariffs. This demand follows the United States’ decision to implement a 25% tariff on primary aluminium imports, while keeping aluminium scrap exempt from the tariff.

As a result, US buyers are likely to switch from importing primary aluminium to sourcing cheaper scrap — particularly from Europe. This shift could lead to a serious shortage of scrap for European recyclers, who rely on stable domestic supply for their operations.

US-EU Price Gap Accelerates Market Arbitrage

The arbitrage between US and EU aluminium prices has widened sharply in recent months. According to market data, the premium gap surged from $110/t in November to nearly $700/t in early May 2025. This creates a strong incentive for exporters to redirect scrap to the US market, further tightening EU supply.

Aluminium Deutschland emphasized that this trend could undermine Europe’s recycling industry. President Rob van Gils called for “swift and decisive action” to avoid dismantling years of progress in circular economy infrastructure.

Europe Faces Growing Scrap Scarcity

Europe's aluminium scrap supply is already strained. Sluggish industrial activity has lowered fresh scrap generation, while Asian demand remains strong, forcing EU recyclers to compete globally. If the EU does not act, companies could face escalating shortages, threatening decarbonisation goals and raw materials security.

The Metalnomist Commentary

Germany’s call for aluminium scrap export tariffs reflects a growing geopolitical competition over raw materials. As secondary aluminium becomes a substitute for tariffed primary metal, the EU risks losing strategic feedstock to global arbitrage. Scrap policy will increasingly define the success or failure of Europe’s industrial climate goals.

 

Aluminium Deutschland warning: German aluminium industry faces job cuts and relocation risk

Aluminium Deutschland

The Aluminium Deutschland warning signals deep stress across Germany’s aluminium value chain. More than 25% of companies plan or made job cuts, the group said. Another 13% consider moving production abroad. High power prices, weak demand, and CBAM costs drive the pressure.

Production has fallen to 76.5–87% of 2021 levels. Extruded and rolled products show the sharpest declines. Meanwhile, plants face weak orders in automotive and machinery. Therefore, investment decisions keep shifting toward lower-cost regions.

Output shrinks as extruded and rolled products lag 2021

Semi-finished output stayed broadly stable year on year in the third quarter. The sector produced about 593,000 tonnes in Q3. January–September production reached about 1.8 million tonnes. However, volumes still trail 2021 levels.

Rolled-product output rose 2% year on year to 1.4 million tonnes in January–September. That output still sits 13% below the same 2021 period. Extruded output fell 1% year on year to 362,000 tonnes. That figure remains 23.5% below the same 2021 period.

CBAM and policy gaps raise costs for imports and producers

CBAM will lift costs across the European Union market. Europe imports about 70% of its aluminium, so costs can spread fast. CBAM could add €30–446 per tonne to imported aluminium, depending on carbon intensity. As a result, buyers will reassess sourcing strategies and premium structures.

Weak growth expectations keep the outlook fragile. Companies do not expect a near-term turnaround, the association said. Rob van Gils warned that capacity cuts and job losses remain likely. Therefore, the Aluminium Deutschland warning points to a competitiveness test for Europe’s core metals base.

The Metalnomist Commentary

Germany can protect German aluminium jobs by lowering industrial power costs and speeding permits. Meanwhile, producers should expand recycling and verified low-carbon billet to defend margins. Therefore, Europe needs grid investment and predictable CBAM guidance to retain capacity.

Amag Aluminium Earnings Fall as Tariffs and Weak Automotive Demand Pressure Margins

Amag Aluminium

Amag aluminium earnings fell in 2025 as weaker shipments, US trade tariffs, and soft European automotive demand weighed on performance. The Austrian downstream aluminium producer reported a 23.5pc decline in Ebitda to €137mn, despite a modest increase in revenue.

Revenues rose by 2.1pc to €1.48bn, supported by higher London Metal Exchange aluminium prices. However, total shipments fell by 1.7pc to 417,600t, while external shipments declined by 2pc to 382,000t. This shows that higher metal prices helped protect sales value but did not offset the pressure on operating earnings.

Amag aluminium earnings also faced headwinds from lower premiums, a stronger euro-dollar exchange rate, and tariff effects across the company’s divisions. The result highlights the difficult position of European downstream aluminium producers, which must manage weak regional demand, high costs, and uncertain trade conditions.

Automotive Weakness Hits Casting and Rolling Performance

Amag’s casting division improved productivity but continued to face weak demand from the European automotive industry. US trade tariffs also affected performance, adding another layer of pressure to already fragile customer demand.

The rolling division faced similar challenges in automotive applications. Sales weakened in the automotive sector, although industrial applications and packaging showed stronger demand. This mixed performance reflects a broader split in downstream aluminium markets, where packaging and industrial uses remain more resilient than vehicle-related consumption.

High energy and personnel costs at Amag’s Ranshofen site further compressed margins. This is a major structural issue for European aluminium processors, especially as competition from lower-cost regions remains intense and customers continue to push for cost control.

Higher Aluminium Prices Limit the Earnings Decline

Higher LME aluminium prices helped limit the fall in Amag aluminium earnings. Average LME aluminium prices were 7.4pc higher than in 2024, supporting revenue even as shipment volumes declined.

However, lower premiums reduced the benefit of stronger aluminium prices, particularly in the metal division. The division also faced weaker shipments and exchange-rate pressure, showing that price gains alone cannot fully protect margins when premiums, volumes, and currency conditions move against producers.

Amag declined to provide an earnings forecast for 2026 because market conditions remain challenging. Still, the company pointed to some positive signs from economic forecasts, sentiment, customs arrangements, and order intake. Overall aluminium demand is expected to rise, but rolled aluminium demand in Europe is likely to remain weak.

The Metalnomist Commentary

Amag’s results show that European downstream aluminium remains caught between price support and weak industrial demand. The key risk is that tariffs and high operating costs continue to erode competitiveness even if broader aluminium consumption improves.

EU-India FTA Could Improve Indian Aluminium Access, but CBAM Still Limits the Upside

Hindalco Industries

The EU-India FTA could improve the position of Indian aluminium suppliers in Europe. The deal would reduce EU tariffs on Indian base metal imports to zero from 10pc. That change could give Indian aluminium exports a stronger commercial opening. As a result, the EU-India FTA may improve competitiveness for producers such as Hindalco and Vedanta.

The tariff change matters because Indian suppliers have faced a clear disadvantage in Europe. Duty-free suppliers such as Norway, Iceland, and Canada already held an edge. Removing the tariff could narrow that gap. Therefore, Indian aluminium suppliers may enter the EU market on more equal terms.

However, the agreement does not remove every barrier. EU CBAM will still apply to imported goods, even after the tariff cut. That means carbon costs will remain a major factor in future trade economics. Consequently, the EU-India FTA improves access, but does not create a fully open market.

Indian Aluminium Exports Could Gain on Tariffs but Still Face Carbon Pressure

Indian aluminium exports could benefit immediately from lower tariff friction. Price-sensitive buyers in Europe may find Indian material more attractive under a zero-duty regime. That could support better trade flows from India to the EU. Meanwhile, producers are still waiting for final clarity on aluminium in the completed legal text.

CBAM remains the deeper long-term issue. The European Commission has already confirmed that the FTA offers no exemption from the carbon border measure. Importers will still face carbon-related obligations under EU climate policy. Therefore, Indian aluminium suppliers must think beyond tariffs and prepare for emissions competitiveness.

This is why industry optimism remains cautious rather than aggressive. Lower tariffs help, but they do not neutralize non-tariff costs. A trader in the article described CBAM as a continuing trade barrier. As a result, the full commercial benefit of the EU-India FTA may prove smaller than the headline suggests.

EU-India FTA Arrives as Indian Aluminium Exports to Europe Have Already Declined

Indian aluminium exports to the EU have already weakened in recent years. Rising domestic demand in India has reduced export availability. Lower export incentives have also weighed on overseas shipments. Therefore, the industry is entering this trade opportunity from a lower export base.

The recent numbers show that decline clearly. India’s primary aluminium exports to the EU fell sharply in 2024 from the previous year. Shipments in January to November 2025 also remained subdued. Consequently, the EU-India FTA may help stabilise exports first before driving a major surge.

The real opportunity will depend on how Indian producers balance three pressures. They must manage domestic demand, EU carbon costs, and international price competition. Tariff relief helps with one of those problems. However, it does not solve the other two. Therefore, Indian aluminium suppliers may gain an edge, but only within tighter structural limits.

The Metalnomist Commentary

This deal improves trade access, but it does not remove the real future test. European aluminium trade will increasingly depend on carbon performance as much as tariff policy. For Indian suppliers, the EU-India FTA is helpful, but CBAM will still decide who wins long term.