Alumina Market Faces Supply Challenges: What’s Next for 2025?

Aluminium

As alumina prices soared to record highs in late 2024, global markets are bracing for more supply disruptions in the coming year. Alumina, the key raw material for aluminium production, faced significant supply shortages due to a combination of environmental regulations, production stoppages, and logistical challenges across major supplying countries. While new projects are expected to alleviate the pressure in 2025, the alumina market remains vulnerable to supply shocks that could impact aluminium prices in the near future.

Supply Disruptions Drive Alumina Prices to Record Levels

Alumina prices surged by over 70% in 2024, with prices peaking above $780 per ton in both China and Australia by November. This price spike was driven by multiple disruptions across the globe, including lower exports from Australia, logistical bottlenecks in Brazil, and production suspensions in Guinea.

In Australia, the tightening of environmental regulations and a fire-related disruption in Queensland affected alumina production, leading to force majeure declarations from major suppliers like Rio Tinto. Meanwhile, in Brazil, Alcoa also declared force majeure in November due to the closure of the Santarem harbor, which blocked access to one of the country’s main bauxite export terminals.

In Guinea, seasonal rains and infrastructure issues led to a nearly 40% reduction in bauxite shipments. Despite these challenges, Emirates Global Aluminium (EGA) indicated that the suspension would not immediately impact its operations, although concerns about long-term supply remained.

Demand and Supply Outlook for 2025

The global aluminium production continued to rise in 2024, particularly in China, where new production capacities came online. Despite this, China’s alumina production has failed to keep pace with aluminium output, leading to a sharp rise in alumina imports. By the end of September, China had imported over 123 million tons of alumina, a 33% increase compared to the same period in 2023.

However, relief may be on the horizon. In 2025, China is set to add more than 13 million tons of new alumina capacity, while other key players, including India’s Vedanta Resources and Guinea’s EGA, are planning significant new alumina refining projects that could ease the global supply squeeze by 2026. UBS forecasts a surplus of 960,000 tons of alumina in China next year, a dramatic turnaround from the deficit observed in 2024.

Despite these optimistic forecasts, challenges remain. The tightness in bauxite supply—especially from Guinea, which supplies 72% of China’s alumina imports—could continue to limit alumina production in China. Environmental regulations in China’s key bauxite-producing provinces, coupled with logistical issues in Guinea, mean that alumina markets will likely remain susceptible to disruptions throughout 2025.

Conclusion

While new alumina production capacities are expected to ease supply pressures in the coming years, the market remains highly vulnerable to supply shocks. Stakeholders in the alumina and aluminium industries will need to closely monitor the situation in major producing regions, particularly in Guinea and China, as these could have significant implications for aluminium prices in 2025. With alumina supply still concentrated in a few key regions, the risk of further disruptions remains high, and the industry must prepare for potential volatility.

Alcoa Shifts Focus to Aluminium Production with Alumina Cuts in 2025

Alcoa

US aluminium producer Alcoa has announced plans to cut alumina output and ramp up aluminium production in 2025. In its annual report, released on January 22, Alcoa revealed it had met its production targets for 2024, producing 10 million tons of alumina and 2.2 million tons of aluminium. While aluminium production grew by 4.8% from 2023, alumina output fell by 2.9%. This strategic move highlights Alcoa's ongoing adjustments in response to market conditions and operational challenges.

Alumina Production Cuts Continue into 2025

For 2025, Alcoa expects alumina production to range between 9.5 million and 9.7 million tons, marking the second consecutive year of output reductions. The company had previously halted operations at its Kwinana plant in Western Australia, which had a capacity of 2.2 million tons per year. This decision followed a combination of high operating costs, the plant's age, and soaring bauxite prices. As a result, Alcoa plans to continue sourcing alumina externally, a strategy it began in 2024 to fulfill customer orders and maintain supply chain efficiency.

Aluminium Production Growth Driven by Plant Resumptions

On the aluminium front, Alcoa saw significant growth, increasing its output by 4.8% in 2024. This increase was driven in part by the resumption of operations at its Warrick and Alumar joint venture smelters in the US and Brazil, which had been inactive for years. In 2025, Alcoa forecasts aluminium production to rise further to between 2.6 million and 2.8 million tons, as these plants continue to scale up operations. The company’s aluminium output is expected to remain steady through 2024, with quarterly production gradually increasing.

Alcoa Looks Ahead with Positive Aluminium Price Outlook

Alcoa's financial outlook for 2025 is further supported by the positive trend in aluminium prices. The London Metal Exchange's aluminium cash price rose from $2,110 per ton to $2,611 per ton over the past year, reflecting growing demand. Additionally, the removal of the tax rebate on commodities, including aluminium, by China in December 2024 is expected to further elevate prices, benefiting Alcoa's bottom line.

UAE’s EGA Faces Bauxite Shipment Suspension from Guinea Amid Global Aluminium Market Disruptions

EGA

The global aluminium industry is facing renewed uncertainty as Emirates Global Aluminium (EGA), a UAE-based company, confirmed the suspension of bauxite shipments from its Guinea Alumina subsidiary. The halt was enacted by Guinean customs officials, who have yet to provide an explanation or a timeline for the resumption of exports. EGA has stated that, for now, the stoppage will not impact operations at its Al Taweelah alumina refinery in the UAE, a key link in the supply chain for aluminium production.

Aluminium prices on the London Metal Exchange (LME) responded swiftly to the news, surging 3.73% to reach $2,653.50 per tonne, marking a significant movement in the day’s trading session. This price increase adds to a year of volatility in the alumina market, driven by repeated supply interruptions. "We are seeking clarity from customs on the reason for this action and are working to resolve this as quickly as possible," said an EGA representative.

Rising Aluminium Prices and Global Supply Chain Concerns

The bauxite shipment suspension from Guinea follows a series of disruptions in alumina production worldwide, which have collectively placed pressure on the aluminium market. In Australia, US aluminium producer Alcoa has announced plans to fully halt alumina production at its Kwinana refinery, which has an annual capacity of 2.2 million tonnes. Meanwhile, China has seen its own limitations on alumina production this year, further tightening global supply.

These restrictions come as the aluminium industry navigates increasing demand for lightweight metals in various sectors, from construction to electronics, adding to price pressures. Market analysts suggest that such supply chain interruptions could lead to sustained high prices for aluminium if production does not stabilize soon.

Alba Reports Strong Profit Growth for Q4 and FY2024 on Higher Output and LME Prices

Aluminium Bahrain

Aluminium Bahrain Sets New Production Record and Boosts Value-Added Sales

Aluminium Bahrain (Alba) delivered strong financial results in both the fourth quarter and full year of 2024, supported by record aluminium production and higher London Metal Exchange (LME) prices.

Alba’s Q4 2024 profit rose 58.5% to BD37.1 million ($98 million) compared to the same period in 2023. Full-year profit climbed 56.4% to BD184.5 million, reflecting robust market conditions and operational stability.

Alba set a production record of 1.622 million tonnes in 2024, slightly up by 0.1% from the previous year. This came despite a minor fire in November at a power rectiformer supporting Reduction Line 1.

The output milestone follows the full optimisation of Reduction Line 6, which reached its 560,000 t/yr capacity in April 2023.

Value-Added Sales and Premiums Drive Earnings Momentum

Average LME aluminium prices were 7% higher year-on-year in 2024, with Q4 prices up 17%, helping to lift Alba’s top line. Meanwhile, spot aluminium delivery premiums surged to multi-year highs amid tight global supply and growing geopolitical risk.

Alba’s sales volumes rose by 1% to 1.61 million tonnes in 2024. 

Notably, value-added product (VAP) sales rose to 72% of total sales, compared to 68% in 2023, supporting stronger margins.

The company’s performance reflects a combination of operational excellence, strategic investments in capacity, and favorable pricing trends. As aluminium demand continues to rise globally, Alba is well positioned to capture premium market segments with its value-added offerings.

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.

China's Aluminium Scrap Imports Expected to Climb as Import Curbs Ease

China's Aluminium Scrap

China's aluminium scrap imports are poised for a significant rise after the country announced the easing of import restrictions, effective November 15. The revised regulations include the addition of secondary high-purity aluminium and secondary deformed aluminium alloys to the list of approved imports, alongside secondary wrought aluminium alloys, which were authorized in 2020. These developments reflect China's strategic shift toward mitigating domestic aluminium scrap shortages and optimizing resource utilization.

Policy Easing and Its Implications

The new policy, announced in an official notice on October 23, sets stringent standards for imported scrap: a minimum aluminium content of 91% and a maximum impurity limit of 0.8%. Market participants believe this regulatory change could encourage smelters to increase their reliance on aluminium scrap feedstock, thereby lowering raw material costs amid persistent domestic shortages.

Challenges from Negative Import Arbitrage

Despite the optimistic outlook, China's aluminium import arbitrage has been predominantly negative since April. High import prices, tied to primary aluminium price negotiations, have dampened traders' enthusiasm. However, the introduction of this policy has generated renewed interest in the scrap market. A scrap trader noted that while current price pressures persist, the policy shift has ignited buying interest.

Recent Import Trends and Market Dynamics

From January to September, China imported 135.2 million tonnes of aluminium scrap, marking a 6.7% year-on-year increase, according to customs data. Meanwhile, domestic alumina prices have surged in recent months due to tight bauxite supplies and robust demand from aluminium producers. This price environment underscores the importance of cost-effective scrap imports to support the country’s aluminium industry.

With these policy adjustments, China aims to address supply shortages, stabilize aluminium markets, and ensure a more sustainable approach to raw material sourcing. However, market dynamics, particularly import pricing and arbitrage conditions, will play a critical role in determining the full impact of this regulatory shift.

Alba Achieves Record Profits and Output in 2024 on Rising Aluminium Prices

Alba

Fourth Quarter Profit Soars 58.5% as LME Prices and Premiums Strengthen

Value-Added Product Sales Boost Bottom Line Despite Operational Setback

Aluminium Bahrain (Alba) reported robust financial results for 2024, posting record fourth-quarter and full-year profits on the back of historic output and favorable market conditions. Alba’s net profit for Q4 2024 surged 58.5% year-on-year to 37.1 million Bahraini dinar ($98 million). For the full year, net profit reached BD184.5 million, marking a 56.4% increase compared to 2023.

Production Record Set Amid Industrial Challenge

Alba achieved a production record of 1.622 million tonnes of aluminium in 2024, despite a minor industrial fire in November affecting its reduction line 1. The strong output follows the optimization of reduction line 6, which reached its full capacity of 560,000 t/year in April 2023. Notably, Alba’s operational resilience enabled it to maintain growth even in the face of disruptions.

Market Forces Drive Revenue Growth

The company benefited from a 7% increase in average LME aluminium prices in 2024, and a 17% spike during the fourth quarter. Spot aluminium delivery premiums hit multi-year highs, reflecting tight supply and heightened geopolitical risks. Sales volumes edged up 1% to 1.61 million tonnes, while value-added products made up 72% of total sales, up from 68% in 2023—further enhancing profitability.

Alba’s strategic focus on capacity optimization and value-added products has strengthened its market position, allowing it to capitalize on price surges and changing global dynamics. This success story highlights the resilience and adaptability required to thrive in the modern aluminium industry.

Blanket US Aluminium Tariffs to Have Limited Impact on European Trade Flows

US Aluminium

Trump's 25% Tariff on All Aluminium Imports Will Affect US Consumers, Not European Markets

US President Donald Trump’s announcement of a blanket 25% tariff on all aluminium imports is expected to have minimal impact on European trade flows. This contrasts with earlier plans to impose tariffs specifically on imports from Canada and Mexico. According to market participants, the new approach is unlikely to disrupt European markets as much as the previous strategy might have.

Impact of Blanket Tariffs on Aluminium Trade

Trump’s new tariffs, which will apply to all aluminium imports, are set to be announced soon. This blanket tariff on steel and aluminium is expected to affect all exporting countries without distinguishing between suppliers. Canada, the UAE, and Argentina were the leading exporters of unwrought aluminium to the US last year, but the tariffs will now apply to everyone, making it difficult for countries like Canada to redirect excess supplies to Europe as initially anticipated.

Under the previous plan, markets predicted a shift in trade flows, with more Canadian aluminium potentially moving to Europe. This was expected to reduce European premiums due to an increase in supply, as demand in Europe remained weak. However, under the new tariff strategy, this shift is likely to be less pronounced. The global competitiveness of Canadian aluminium is diminished when tariffs apply universally, making aluminium from other regions, such as the Middle East and South America, less attractive in the US market.

Consequences for US Consumers and Domestic Production

The main consequence of these blanket tariffs will be higher costs for US consumers. While the tariffs could potentially drive up domestic production, increasing capacity will take years. In the meantime, US buyers will face higher prices for aluminium imports, particularly from Canada, as shipping times from these suppliers are shorter than those from more distant countries.

Market analysts believe that, despite the tariffs, US consumers will continue to import from Canada because of these logistical advantages. The blanket tariff strategy is unlikely to redirect a significant volume of Canadian aluminium to Europe, meaning the overall impact on European aluminium flows will be minimal.

Conclusion: A Shift in Costs, Not Trade Flows

In conclusion, Trump’s blanket tariffs on aluminium imports are expected to result in higher costs for US consumers but will have limited consequences for European trade flows. The market will likely experience some adjustments, but European aluminium premiums are not expected to drop significantly as a result of these changes.

Japan’s Sumitomo Chemical Exits Brazilian Aluminium Refining: Focus on Business Optimization

Sumitomo Chemical

Japanese petrochemical giant, Sumitomo Chemical, has sold its 2.97% stake in Nippon Amazon Aluminium Co. (NAAC) to YKK AP, a domestic architectural goods supplier, as part of its broader business optimization strategy. With this transaction finalized on December 19, YKK AP's stake in NAAC has risen to 6.31% from 2.02%. While the financial details of the transaction were not disclosed, the move signifies a strategic shift for Sumitomo Chemical as it exits overseas aluminium refining operations.

NAAC holds a 49% stake in Aluminio Brasileiro S.A. (Albras), a Brazilian aluminium refiner renowned for producing 450,000 tons of aluminum ingots annually. Albras operates using renewable energy, making it a key player in reducing CO2 emissions in the aluminium production process. This aligns with growing global demand for sustainable and low-carbon aluminium products.

YKK AP's Green Aluminium Expansion

The deal positions YKK AP to double its aluminium ingot output, an important milestone in its efforts to procure green aluminium feedstock and decarbonize its operations. The company uses approximately 140,000 tons of aluminium annually within Japan. This acquisition is part of YKK AP's push to adopt sustainable materials and strengthen its competitiveness in the eco-conscious global market.

Sumitomo Chemical’s Broader Realignments

Sumitomo Chemical’s decision to sell its NAAC shares marks a complete withdrawal from the overseas aluminium ingot business. The company cited high profitability volatility in imported aluminium markets, largely influenced by fluctuating global aluminium prices. Earlier in the year, Sumitomo Chemical divested its shares in New Zealand Aluminium Smelters and Boyne Smelters to Rio Tinto, the UK-Australian mining conglomerate.

The company has also exited from two polypropylene (PP) compound manufacturing subsidiaries in China due to intensifying competition from local producers. Announced on December 18, this move reflects Sumitomo Chemical’s focus on optimizing its business portfolio by concentrating on more stable and profitable ventures.

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.

JPMorgan Cuts Base Metal Price Forecasts Amid Recession Fears

JPMorgan Metal Price Report Image

Focus Keyphrase: Base Metal Price Forecasts

JPMorgan has sharply lowered its base metal price forecasts, citing rising recession risks tied to Donald Trump's trade policies. The bank now anticipates up to a 20% drop in average prices through 2026 due to tariff-driven reductions in global demand growth, particularly for copper and aluminium.

Forecasts for copper and aluminium demand fell by 1%, flipping projected deficits into surpluses of 170,000t and 200,000t, respectively. Nickel and zinc markets are also now expected to post significant surpluses of 250,000t and 130,000t in 2025.

Copper and Aluminium Markets See Major Revisions

Copper is now forecast to average $8,300/t in Q1, down from $9,400/t, and $9,000/t in Q4, down from $10,400/t. Aluminium prices are similarly revised to $2,200/t in Q1, with only modest gains expected later in the year.

Despite stimulus measures stabilizing China’s demand outlook, JPMorgan expects global oversupply. Lower economic activity, particularly in developed economies, will weigh on construction and industrial consumption.

Nickel and Zinc Also Face Downward Pressure

Nickel and zinc price forecasts were cut by 12% for the rest of 2025. For 2026, copper prices are now expected to average $9,375/t (down 15%) and aluminium at $2,463/t (down 14%). Nickel and zinc follow suit with price declines of 10% and 8%, respectively.

JPMorgan emphasized that downside risks dominate the outlook, as further trade war escalation could trigger deeper recessions. This may push prices below cost curves and pressure marginal producers globally.

The Metalnomist Commentary

JPMorgan’s revised forecasts reflect growing uncertainty in global industrial demand. As trade tensions escalate, metals markets could remain under pressure unless macroeconomic momentum improves.

Chalco Reports Increased Aluminium and Alumina Output in January-September

Chalco

Chalco, China's state-owned aluminium producer, has reported notable increases in both its primary aluminium and alumina production for the January-September period, compared to the same period last year. The rise in output is reflective of strong domestic demand for these materials, which have supported price growth across the industry.

During the first nine months of 2024, Chalco’s primary aluminium output, including aluminium alloys, rose by 14% year-on-year, reaching 5.62 million tons (mn t). This increase in production aligns with a 13% rise in primary aluminium sales, which also reached 5.6 million tons over the same period. This performance underscores Chalco's strong market position in the aluminium sector, with solid sales and production figures helping to bolster its standing in an increasingly competitive market.

Chalco also saw a slight increase in its metallurgical alumina output, a crucial feedstock used in primary aluminium production. The company produced 12.57 million tons of alumina in January-September, marking a 0.9% rise over the previous year. However, the company reported a decline in alumina sales, which fell by 4.8% to 4.77 million tons during the same period.

In terms of product segmentation, Chalco’s fine alumina production grew by 15% year-on-year, reaching 3.25 million tons, up from 5.01 million tons in 2023. Fine alumina is used in the production of higher-value products, and this increase reflects Chalco's shift towards higher-quality, more profitable outputs.

The increase in both aluminium and alumina production was supported by strong domestic demand, which helped push prices higher during the reporting period. Chalco noted that higher profitability within the aluminium and alumina production sectors encouraged manufacturers to maximize their production run rates, further driving output.

According to China's National Bureau of Statistics, the country’s total aluminium production grew by 4.6% year-on-year to 32.56 million tons in the January-September period, while alumina output rose by 2.4% to 63.13 million tons.

Strong Demand Supports Price Growth in Aluminium and Alumina

The performance of Chalco and other domestic producers is being driven by persistent domestic demand in China, one of the world’s largest consumers of both aluminium and alumina. Rising prices for both materials have contributed to improved profitability across the industry. Despite a decline in alumina sales, Chalco’s overall production and sales growth in aluminium highlights a promising outlook for the company in the remainder of the year.

As Chalco continues to ramp up production, it is expected that the market will remain focused on the ongoing balance between domestic demand, production capabilities, and price fluctuations, particularly as global economic conditions continue to evolve.

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.

 

Goldman Sachs Cuts Aluminium Price Forecast on Weaker Global Growth

Aluminium

Trade Tariffs Pressure Aluminium Market Outlook

Goldman Sachs has lowered its aluminium price forecast due to slowing global growth driven by rising US trade tariffs. The US bank now expects LME aluminium prices to average $2,000/t in Q3 2025, rising to $2,300/t by year-end. This is significantly down from its prior forecast of $2,650/t by late 2025 and $3,100/t in 2026.

US tariffs on aluminium imports from key trading partners have weakened global demand and sentiment. Meanwhile, new tariffs announced in April—targeting electronics and pharmaceuticals—may further suppress economic activity. Goldman now sees aluminium demand growth at 1.1–2.3% over 2025–26, down from earlier 2.4–2.6% projections.

Market Faces Surplus, But No Smelter Closures Expected

Goldman Sachs forecasts a global aluminium surplus of 580,000 tonnes in 2025, reversing a previously expected deficit. However, it does not foresee widespread smelter shutdowns, even with prices at the cost curve’s 75th percentile. Still, a prolonged downturn below $2,000/t could eventually force curtailments to stabilize supply-demand balance.

The bank cautioned that downside risks remain, especially if the US-China trade war escalates. Despite near-term weakness, Goldman anticipates a moderate demand-driven recovery in late 2025 into 2026.

The Metalnomist Commentary

Goldman’s aluminium downgrade reflects how industrial metals remain highly sensitive to trade policy shifts. Producers may avoid closures in the short term, but prolonged margin pressure could reshape the supply landscape.

Rusal's 2024 Earnings Surge Despite Sanctions and Market Headwinds

Rusal

Aluminium giant increases EBITDA by 90% amid sanctions, falling costs, and domestic market pivot

Russia’s top aluminium producer Rusal reported a dramatic earnings increase in 2024, despite facing international sanctions and weak global demand. The company’s EBITDA soared to $1.49 billion, a 90% jump year-on-year, thanks to lower production costs and a strategic pivot to domestic markets.

Rusal’s revenues dipped slightly by 1.1% to $12.08 billion, but net profits surged to $803 million, up from $282 million in 2023. The producer boosted aluminium output to 3.99 million tonnes, up 3.7%, and alumina production by 25% to 6.43 million tonnes.

Notably, Rusal acquired a 30% stake in Hebei Wenfeng New Materials in late 2023, securing access to 1.4 million tonnes per year of alumina in China’s Hebei province. The company also lifted bauxite output by 18.8% to 15.89 million tonnes.

Sanctions Drive Market Realignment

In April 2024, the US and UK banned exchange-traded Russian aluminium, copper, and nickel, barring imports and services tied to these metals. The London Metal Exchange (LME) subsequently banned Russian-origin metals from its warehouses, intensifying pressure on Rusal.

Despite these barriers, Rusal successfully reorganized its export channels and expanded domestic sales, minimizing disruption. The company also lowered its overall cost of sales by 11.3%, aided by falling raw material and energy costs.

Aluminium prices rose 3.3% on average in 2024, while alumina prices surged nearly 47% due to global supply constraints.

Outlook Remains Cautious

Rusal noted that the global aluminium industry remained under pressure from volatile input prices, sluggish demand, and high interest rates. Yet, by shifting to local markets and improving operational efficiency, the company weathered macroeconomic turbulence and reinforced its production base.

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.

Global Aluminium Output March Growth Slows Despite Annual Gains

International Aluminum

Global aluminium output in March rose year-on-year but slowed slightly compared to February’s pace, signaling potential volatility ahead. The global aluminium output March data from the International Aluminium Institute reveals shifting regional dynamics as China leads production while other regions show mixed trends.

China Drives Annual Output Growth but Faces Trade Headwinds

Global aluminium production totaled 6.23 million tonnes in March, up 2.27% from the same month last year. However, average daily production declined to 200,900 tonnes, down from February’s revised 202,100 tonnes. China was the largest contributor, producing 3.73 million tonnes—up 3.41% year-on-year. Only October and December 2023 saw higher output.

Domestic demand and healthy profit margins drove China's production growth. However, escalating trade tensions with the U.S. may undermine this momentum. The aluminium industry is now watching closely for signs of further instability in Chinese industrial output.

Mixed Regional Trends Highlight Uneven Global Recovery

Outside China, production showed mixed results. Europe’s output increased 2.77% to 594,000 tonnes, while Asia (excluding China) rose 1.22% to 415,000 tonnes. Africa and South America posted stronger growth at 7.81% and 3.15% respectively.

In contrast, output declined in North America (down 0.88%), Oceania (down 1.86%), and the Middle East (down 2.61%). These declines may reflect energy costs, regulatory changes, or weakening demand in key export markets.

Price Volatility Reflects Market Uncertainty

London Metal Exchange (LME) aluminium prices averaged $2,650/t in March, a notable increase from $2,270/t a year earlier. However, prices retreated in April to an average of $2,407/t amid global equity market declines triggered by worsening U.S.–China trade tensions. This volatility is raising concern across supply chains and influencing production strategies globally.

The Metalnomist Commentary

The March rise in global aluminium output masks underlying signals of softness in monthly momentum. With geopolitical tensions and pricing instability increasing, producers may adopt a more cautious stance in the months ahead.

Rio Tinto’s Copper, Aluminium Earnings Surge in First Half of 2024

UK-Australian mining firm Rio Tintos aluminium and copper earnings increased year on year in the first half of 2024.

Copper

Earnings before interest, tax, depreciation, and amortization (Ebitda) in Rio Tinto's copper business increased by 67% on the year in the first half to $1.8 million, benefiting from the ramp-up at Oyu Tolgoi in Mongolia and resumed operations at the Kennecott smelter in the United States following its rebuild last year.

Rio Tinto's mined copper production increased by 13% on the year to 327,000 tons in the first half of this year on the back of higher output from its three operations. Mined copper output increased by 9% on the year at Escondida in Chile and 18% at Kennecott. Mined copper output also increased by 15% at Oyu Tolgoi, keeping it on track to reach 500,000 tons per year of copper from 2028 to 2036.

Refined copper production increased by 32% on the year to 125,000 tons in the first half owing to the resumed operations at Kennecott, partially offset by lower refined copper production from Escondida by 19%.

The firm expects to produce 660,000-720,000 tons of mined copper and 230,000-260,000 tons of refined copper in 2024.

Aluminium

Rio Tinto's aluminium business saw Ebitda jump 38% higher on the year in the first six months, reaching $1.58 billion, as revenues edged up by 4% to $6.49 billion.

The company reported easing costs for key raw materials such as caustic soda, coke, and pitch. Average all-in prices remained broadly stable as rising London Metal Exchange aluminium prices were mitigated by lower premiums.

Rio produced 1.65 million tons of aluminium in the first half, up by 3% on the year, with broadly stable production across its smelter network.

The company produced 3.54 million tons of alumina in the first half, down by 5% on the year, while bauxite production rose by 10% on the year to 28.1 million tons in the first half.

In the second quarter, Rio Tinto began consolidating ownership of its aluminium smelters. At the end of May, the company agreed to acquire Japanese firm Sumitomo Chemical's stake in New Zealand Aluminium Smelters, giving Rio Tinto 100% ownership of the company. The following month, it agreed to acquire Japanese firm Mitsubishi's 11.65% stake in the Boyne Smelters subsidiary, which owns and operates the Boyne Island aluminium smelter in Gladstone.

China's Alumina Capacity Expansions to Slow Down Under New Policy

China Alumina

Government Plan Signals Shift in Alumina Market Strategy

China's alumina capacity growth is set to decelerate following a new industrial development plan released in March 2025. The Aluminium Industry High-Quality Development Action Plan (2025–2027) requires new alumina projects to include bauxite mining operations and avoid high-pollution zones.

This move aims to control overheated investments, reduce redundant competition, and enhance domestic resource utilization, according to speakers at a recent CNIA conference. Market participants believe this policy shift will suppress further rapid expansions, especially amid growing signs of alumina oversupply.

Oversupply Risks and Price Volatility Emerging in 2025

China became a net alumina exporter in 2024, with exports rising by 43pc, driven by tight overseas supply and rising global prices. Domestic alumina prices surged to a record Yn5,800/t ($793.49/t) in December, but have since plummeted below Yn4,000/t, leading to negative profit margins.

In the first two months of 2025, output rose 13pc year-on-year to 15.13mn t, as new projects in Guangxi and Shandong added 3mn t/yr of capacity. Industry estimates now forecast a 10mn t/yr rise in total capacity for the year, while aluminium output is expected to grow only 1.2pc, creating a projected 1.3mn t surplus.

CNIA expects alumina production to hit 91mn t in 2025, with exports at 1.5mn t and consumption reaching 88.2mn t. This imbalance highlights the risk of prolonged low prices and margin compression in the sector.

China to Boost Domestic Bauxite and Recycling Capabilities

To support its alumina sector, China plans to expand domestic bauxite resources by 3–5pc by 2027. This includes exploration of coal-bed bauxite and development of low-grade, high-sulphur reserves, traditionally seen as challenging due to environmental concerns.

Shanxi province is likely to be a key site for new bauxite mining under coal beds, as noted by CNIA expert Meng Jie. In 2024, domestic bauxite output dropped 12pc to 73.9mn t, while imports rose 13pc to 159mn t, making up 68pc of total supply.

China will also promote aluminium recycling, aiming to produce 15mn t of secondary aluminium by 2027. This includes industry park development and relaxed import rules for aluminium scrap, supporting the transition to a circular economy in aluminium production.

The Metalnomist Commentary

China’s new alumina policy marks a clear pivot toward sustainability, supply security, and rational investment. While the action plan may cause short-term market disruption, it paves the way for a more integrated and resilient aluminium value chain—anchored in controlled expansion, domestic bauxite development, and circular material flows.

Rio Tinto Increases Aluminium and Copper Production in 2024, Sets Higher Targets for 2025

Rio Tinto

Strong Growth in Bauxite and Aluminium Output

Rio Tinto, a leading UK-Australian mining firm, reported increased bauxite and aluminium production in 2024, surpassing expectations. The company extracted 58.7 million tonnes of bauxite, exceeding its guidance range of 53-56 million tonnes. Despite a 3% decline in alumina production, Rio Tinto achieved 7.3 million tonnes, reaching the upper limit of its revised 7-7.3 million tonne guidance.

The Amrun bauxite mine in Queensland, with a 10 million tonne per year capacity, operated above its expected levels. Meanwhile, aluminium production rose by 1% to 3.3 million tonnes, supported by the Kitimat plant in Canada, which reached full capacity in late 2023, and Rio Tinto’s ownership of the New Zealand Aluminium Smelter.

Copper and Alumina Expansion Plans for 2025

Rio Tinto revised its 2025 production targets, slightly increasing projections for bauxite, alumina, and aluminium. The company expects:

• 57-59 million tonnes of bauxite
• 7.4-7.8 million tonnes of alumina
• 3.25-3.45 million tonnes of aluminium

The New Zealand Aluminium Smelter will continue ramping up in early 2025, while Rio Tinto aims to complete the AP60 low-carbon aluminium smelter expansion in Quebec, Canada, by 2026. This project will increase aluminium output by 160,000 tonnes per year to 220,000 tonnes per year.

Copper Production Strategy and Expansion Projects

Rio Tinto modified its copper reporting metrics, consolidating mined and refined copper output into a single figure. The company targets 780,000-850,000 tonnes of copper production in 2025, up from 792,000 tonnes in 2024.

Growth will primarily come from:

• The Oyu Tolgoi mine in Mongolia, which ramped up to 168,100 tonnes per year in 2024.

• The North Rim Skarn copper project near Salt Lake City, US, set to launch in mid-2025 with an expected output of 250,000 tonnes per year.

With rising global demand for low-carbon aluminium and copper, Rio Tinto’s production increases could significantly impact global supply chains and metal prices.