Global aluminium deficit to widen as EV and renewable demand surges

Global aluminium

Global aluminium deficit is set to widen from 2025 as demand outruns constrained supply. Forecasts show global primary aluminium supply rising to 74.3mn t in 2025, 75.8mn t in 2026 and 76.5mn t in 2027, driven mainly by new smelter projects outside China. However, parallel demand growth from electric vehicles and renewable energy will push consumption to 74.5mn t in 2025, 76.1mn t in 2026 and 76.8mn t in 2027, creating annual deficits. These figures translate into a global aluminium deficit of 166,000t in 2025, 281,000t in 2026 and 291,000t in 2027, underscoring a steadily tightening balance.

EV and regional supply dynamics reshape global aluminium deficit

The global aluminium deficit emerges despite incremental regional capacity growth and relatively stable legacy production. Australian primary aluminium output is expected to remain flat at 1.6mn t/yr across 2025-27, highlighting limited upside from a key exporter. Meanwhile, Chinese production is expected to remain below its formal 45mn t/yr cap, reinforcing structural constraints in the world’s largest market. Additional tonnes will therefore come from newer producers, with Indonesia forecast to lift output to 700,000t in 2025 and then double to 1.4mn t by 2027.

India also plays an important role in narrowing, but not eliminating, the global aluminium deficit. Indian primary production is expected to reach 4.2mn t in 2025 and 4.7mn t in 2027, supported by recent smelter investments and captive power integration. However, growth in EV and renewable segments is highly aluminium-intensive, especially for body sheet, castings and extrusions. As a result, structural demand from auto light-weighting, power transmission, solar frames and battery casings will likely sustain the global aluminium deficit even if some projects underperform. Rising primary prices and strong interest in low-carbon metal will deepen the premium gap between conventional and certified low-carbon material.

Recycling, alumina and bauxite respond to shifting aluminium fundamentals

Recycled metal is set to play a larger role in balancing the global aluminium deficit. Global demand for recycled aluminium is expected to increase from 27mn t in 2025 to 29mn t in 2027, reflecting OEM and policy pressure to cut embedded emissions. Total recycled output is forecast to reach 40mn t in 2025 and 44mn t in 2027, driven by higher utilisation of scrap in China, the US and Europe. This shift will partly cushion primary tightness, but scrap quality, collection systems and sorting capacity will limit how far recycling alone can offset the global aluminium deficit.

Midstream markets show a different pattern, with alumina entering a cyclical surplus even as primary metal tightens. Global alumina output is expected to increase to 148mn t in 2025 and 164mn t by 2027, while demand rises more slowly to 145mn t in 2025 and 151mn t in 2027. This surplus suggests downward pressure on alumina prices as global production recovers. Australian alumina output is forecast to rise from under 17.4mn t in 2024–25 to over 18.5mn t in 2026–27, supported by higher production at the Worsley refinery. In turn, global bauxite supply is projected to reach 422mn t in 2025 and 443mn t in 2027, against demand of 373mn t and 414mn t, highlighting a modest buffer at the ore stage even as the global aluminium deficit tightens the finished metal market.

The Metalnomist Commentary

The projected global aluminium deficit through 2027 underscores how quickly EV and renewable investment can tighten a previously balanced market. For producers, stable alumina and ample bauxite create a favourable cost backdrop, but power prices and carbon policies will still define margins. For buyers, competition for low-carbon and recycled units will intensify, making long-term contracts, scrap strategy and regional diversification critical to securing supply.

EGA Aluminium Recycling Strategy Expands With Eco Green Acquisition

EGA Aluminium Recycling

EGA aluminium recycling strategy has advanced with Emirates Global Aluminium agreeing to acquire an 80% stake in Italian aluminium recycler Eco Green. The deal strengthens EGA’s recycled aluminium footprint in Europe and adds another foreign recycling platform to its growing international network.

Eco Green operates near Verona in northeast Italy. The company collects, sorts and distributes around 23,000 t/yr of aluminium scrap, while its nearby casting facility produces more than 20,000 t/yr of secondary aluminium sows.

EGA aluminium recycling capacity will expand further because Eco Green is planning an additional 15,000 t/yr of recycled aluminium capacity at its casting facility. This gives EGA both existing production and near-term growth potential in the European secondary aluminium market.

The acquisition shows that EGA is moving beyond its traditional UAE-based integrated aluminium model. Instead of relying only on primary metal expansion, the company is buying recycling assets closer to scrap sources and downstream customers.

Eco Green Adds European Scrap and Casting Capacity

Eco Green gives EGA direct access to Italian aluminium scrap collection, sorting and secondary casting capacity. This is strategically important because scrap access is becoming a core competitive advantage in aluminium.

Secondary aluminium requires far less energy than primary aluminium. It also helps customers reduce embedded carbon in automotive, packaging, construction and industrial products.

The Verona-area location gives Eco Green access to Europe’s mature industrial scrap flows. Italy is one of Europe’s major manufacturing centres, which supports steady availability of post-industrial aluminium scrap.

The casting facility also gives EGA a route to convert collected scrap into secondary aluminium sows. This strengthens value capture because the business is not limited to scrap trading or sorting.

The planned 15,000 t/yr expansion will deepen that position. It should allow Eco Green to process more scrap internally and support EGA’s broader recycled aluminium supply targets.

EGA Builds a Global Secondary Aluminium Platform

The Eco Green deal follows EGA’s acquisition of German recycling company Leichtmetalle in 2024. EGA later announced an expansion of that facility, which will increase capacity more than six-fold.

EGA also bought a majority stake in US secondary aluminium smelter Spectro Alloys in 2024. Since then, it has announced two expansions that will lift Spectro’s total capacity to more than 200,000 t/yr of secondary aluminium ingots and billets, from 110,000 t/yr previously.

Following the Eco Green acquisition, EGA aluminium recycling capacity will total more than 400,000 t/yr across the UAE, Europe and the US. A further 200,000 t/yr is under development.

This creates a more diversified aluminium business. EGA can still rely on its primary aluminium base in the UAE, but recycling gives it lower-carbon growth in key consuming regions.

The strategy also responds to customer demand. Buyers increasingly want aluminium with lower carbon intensity, traceable scrap inputs and regional supply security.

For EGA, recycled aluminium acquisitions offer faster market entry than building new primary smelting capacity. They also reduce exposure to energy-intensive growth and place the company closer to circular aluminium supply chains.

The Metalnomist Commentary

EGA’s Eco Green acquisition confirms that global aluminium competition is shifting toward scrap control and secondary capacity. The winners in low-carbon aluminium will not only own smelters; they will own regional recycling networks close to customers.

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.

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.

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.

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 and Alcoa Renew Alumina Supply Agreement Amid Tightening Global Market

Aluminium Bahrain(Alba)

Aluminium Bahrain (Alba), a leading aluminium producer in the Middle East, has renewed its alumina supply agreement with the U.S.-based integrated aluminium company Alcoa. This new, extended agreement will secure up to 16.5 million tonnes of smelter-grade alumina over the next decade, beginning in 2026. This strategic partnership not only strengthens Alba’s operational resilience by ensuring a steady alumina supply but also bolsters its competitive stance in the global aluminium market.

In a recent statement, Alba CEO Ali al-Baqali remarked, “This agreement not only guarantees a steady supply of alumina for our operations but also reinforces our position as a key player in the global aluminium market.”

The renewal of Alba’s alumina supply agreement comes at a critical time as the alumina market faces tightening supply. This is largely due to recent output disruptions in China, a significant alumina-producing nation, which has put pressure on the supply chain. Additionally, Alcoa recently announced plans to fully suspend production at its 2.2 million tonne-per-year Kwinana refinery in Australia by the end of this year, further impacting global supply.

Adding to the challenges, Guinea recently paused bauxite shipments from the subsidiary of UAE-based Emirates Global Aluminium. Although initially this is not expected to directly impact production at Al Taweelah, Emirates Global’s alumina refinery in the UAE, such disruptions in Guinea, a major bauxite source, signal potential long-term effects on the alumina and aluminium industries worldwide.

New Al wire rod plant planned for UAE to supply 36,000 t/yr as power cable demand rises

Mark Cables

New Al wire rod plant planned for UAE will add new downstream capacity next to a major primary aluminium hub. Mark Cables Power Solutions plans to build an aluminium rod manufacturing plant in the Khalifa Economic Zone, adjacent to Emirates Global Aluminium’s Al Taweelah smelter. New Al wire rod plant planned for UAE targets 36,000 tonnes per year of multiple aluminium rod grades. Therefore, the project strengthens regional conversion capacity for power cable and conductor markets.

The plant will supply Mark Cables facilities in Dubai and Angola, while also selling to third-party customers across the UAE, Africa, and Europe. Meanwhile, Emirates Global Aluminium signed a non-binding agreement to supply 35,000 tonnes per year of aluminium to the proposed facility. As a result, the site pairing reduces logistics friction between primary metal and rod conversion.

Wire rod demand grows as grids expand and electrification accelerates

Wire rod is becoming a high-growth aluminium segment as electricity networks expand. Regional and global utilities are building new transmission and distribution capacity to integrate renewable power. Meanwhile, electrification trends in developing economies are lifting baseline demand for cables and conductors. Therefore, New Al wire rod plant planned for UAE aligns with long-cycle grid spending and near-term manufacturing localisation.

Aluminium is also gaining share against copper in many power cable applications. Manufacturers use aluminium to lower material cost while meeting performance requirements. However, substitution depends on design choices, standards compliance, and end-user specifications. As a result, new rod capacity can benefit most where buyers already approve aluminium conductor solutions.

UAE downstream expansion targets value-added exports and supply security

Placing rod production beside a large smelter can improve supply security and working capital efficiency. The proximity can support steadier metal flows, faster turnaround, and lower conversion risk. Meanwhile, selling into Africa and Europe can diversify demand beyond domestic consumption. Therefore, New Al wire rod plant planned for UAE can act as an export-oriented downstream anchor.

The project also signals a broader shift toward value capture inside producing countries. UAE aluminium strategy increasingly links primary output to downstream products that serve energy transition supply chains. However, success will depend on ramp execution, customer qualification, and competitive conversion costs. As a result, early offtake traction with third-party buyers will be a key indicator.

The Metalnomist Commentary

Wire rod investment follows the same logic as grid investment. Meanwhile, aluminium substitution will keep expanding where cost and performance align. Therefore, UAE-based rod capacity could win share by combining low-friction metal supply with export-ready logistics.

EGA Aluminium Recycling Plant Moves Closer to Commissioning at Al Taweelah

EGA Aluminium Recycling Plant

The EGA aluminium recycling plant has reached a major construction milestone at Al Taweelah. Emirates Global Aluminium charged the melting furnace for the first time at its new recycling site. That step moves the project closer to final completion and commercial start-up. As a result, the EGA aluminium recycling plant is becoming a more important part of the UAE’s aluminium value chain.

This development matters because the facility will expand domestic recycling capacity at industrial scale. EGA expects the plant to be completed by the end of this quarter. Scrap sorting equipment commissioning already began in December last year. Meanwhile, work continues on the casting and homogenisation stations. Therefore, the Al Taweelah recycling facility is shifting from construction into final execution.

The project also supports a broader market trend toward lower-carbon aluminium supply. The plant will blend recycled and primary aluminium into low-carbon billets and T-bars. These products will be sold under the RevivAL brand. Consequently, EGA is positioning recycled content as a commercial and strategic advantage.

UAE Aluminium Recycling Capacity Is Entering a New Phase

UAE aluminium recycling is moving into a much larger industrial phase with this project. The new melting furnace has a capacity of 90,000 t/yr. The wider plant will produce 185,000 t/yr of billets and T-bars. That makes the project much more than a niche sustainability initiative.

Scale matters because regional scrap processing capacity remains limited compared with primary aluminium strength. EGA has long been associated with primary metal production. However, the new plant adds a downstream recycling layer that can improve raw material flexibility. As a result, the company can strengthen its position across both primary and secondary aluminium flows.

The project also has national significance. EGA said the facility will become the largest aluminium recycling plant in the UAE. It will also make the company the country’s largest scrap processor. Therefore, the plant may help create a more integrated domestic aluminium ecosystem with stronger circularity.

Low-Carbon Aluminium Billets Could Strengthen EGA’s Market Position

Low-carbon aluminium billets are becoming more important as buyers demand lower-emission metal solutions. Customers in construction, transport, and industrial manufacturing increasingly want products with stronger carbon credentials. EGA’s recycling project responds directly to that shift. Meanwhile, the inclusion of primary aluminium gives the company more control over consistency and specification.

This blended production model may also offer commercial flexibility. Pure scrap-based output can face limits in chemistry control and product range. By combining recycled and primary metal, EGA can target both sustainability and performance. Consequently, the plant could appeal to customers that want lower-carbon material without sacrificing technical requirements.

The timing is also notable for the wider aluminium market. Producers are under pressure to show credible decarbonisation pathways, not only long-term targets. New recycling assets offer one of the fastest ways to improve emissions intensity. Therefore, the EGA aluminium recycling plant could become a visible example of how Gulf aluminium producers adapt to changing market expectations.

The Metalnomist Commentary

This project matters because it connects scale, recycling, and low-carbon product strategy in one asset. EGA is not just adding a furnace. It is building a stronger position in the future aluminium market, where recycled content and product quality will increasingly move together.

Global Aluminium Output Slightly Rises in August Amid Production Slowdown in China

Global Aluminium

Global aluminium output in August saw a modest rise compared to the same period last year but dipped from the record production levels reached in July, as growth in China, the world’s largest producer, stalled. According to data from the International Aluminium Institute, global production reached 6.18 million tonnes, marking a 1.2% year-on-year increase. Daily production rates averaged 199,300 tonnes, slightly lower than July’s revised figure of 199,500 tonnes.

China's Aluminium Output Stalls

China produced 3.69 million tonnes of aluminium in August, reflecting a 1.32% rise compared to the same month last year, but remained unchanged from July. Earlier in the summer, China had ramped up production due to new projects coming online in Inner Mongolia during the second quarter. Strong aluminium prices in China further incentivized existing smelters to maximize output for better profitability. However, growth plateaued in August as existing capacity reached its limits.

In other regions, aluminium production largely mirrored this trend, with slight year-on-year increases but flat growth compared to the previous month. North America produced 334,000 tonnes, a 0.3% increase from last year but down slightly from July. Western Europe saw a 5.65% year-on-year rise to 243,000 tonnes, while Asia, excluding China, produced 408,000 tonnes, showing a 3.03% rise. South American production rose by 4% to 130,000 tonnes.

The Middle East edged up 0.57% to 530,000 tonnes, while Russia and Eastern Europe increased production by 4.73% to 354,000 tonnes. In contrast, Australasia saw a decline of 3.75% to 154,000 tonnes, and African output remained steady at 135,000 tonnes.

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.

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.

Qatalum Aluminium Output to Stay at 60% as Gas Supply Continues

Qatalum Aluminium

Qatalum aluminium output will remain at around 60% capacity after QatarEnergy confirmed it would continue supplying gas to the smelter at reduced levels. The update prevents a full shutdown of the Qatar-based aluminium operation and reduces the risk of a prolonged production outage.

Hydro had earlier said Qatalum had started a controlled shutdown of its aluminium operations after QatarEnergy took the Ras Laffan LNG export terminal offline. The disruption followed a drone attack at the wider Ras Laffan industrial complex, raising immediate concerns over gas availability for energy-intensive aluminium production.

Qatalum aluminium output now has a clearer short-term operating path. Hydro said the reduced gas supply is sufficient to maintain production at about 60% capacity until further notice. That decision is important because aluminium smelters are difficult and costly to restart after a complete shutdown.

Reduced Operations Protect Qatalum From a Long Restart Timeline

Maintaining Qatalum aluminium output at reduced capacity gives the joint venture operational flexibility. Hydro said a full shutdown could have required a restart timeline of six to twelve months. By keeping the smelter running, Qatalum can move back toward full production more quickly once gas supply conditions improve.

The smelter has a nameplate capacity of 636,000 tonnes per year of primary aluminium. It also operates a 664,000-tonne casthouse, making it an important supplier of aluminium products to international markets.

The gas supply issue also highlights the vulnerability of aluminium smelting to energy disruption. Primary aluminium production requires continuous power and stable thermal management. When gas supply is constrained, producers must balance output reduction against the severe operational risk of shutting down potlines completely.

Hormuz Shipping Disruption Adds Pressure to Aluminium Supply Chains

The production update does not remove the broader supply-chain risk. Shipments from aluminium smelters to international customers remain disrupted because of halted shipping through the Strait of Hormuz. The waterway is a critical route for Gulf industrial exports, including metals and energy products.

Security risks in the Middle East Gulf have intensified after attacks on several vessels and US action against mine-laying ships near the strait. Any mine-related threat in regional waters could prolong disruption to commercial shipping even if wider hostilities ease.

For global aluminium buyers, the issue is therefore both production and logistics. Qatalum may avoid a full shutdown, but reduced operating rates and shipping uncertainty can still tighten availability, delay deliveries, and increase risk premiums in aluminium supply contracts.

The Metalnomist Commentary

Qatalum’s 60% operating plan is a damage-control outcome rather than a full recovery. The bigger market risk is that energy disruption and Hormuz shipping pressure could hit Gulf aluminium supply at the same time.

Century Nordural Aluminium Restart Moves Ahead After Iceland Potline Outage

Century Nordural aluminium

Century Nordural aluminium restart has begun at the company’s Grundartangi smelter in Iceland after an electrical equipment failure halted production on the second potline in October. Century Aluminum said the first pots have been energised and the remaining pots will be restarted on an accelerated schedule.

The Century Nordural aluminium restart is expected to bring the second potline close to full production by the end of July. The restart follows repairs to failed transformers, which are scheduled to be replaced with new units later this year.

Century Nordural aluminium restart timing is important because the global aluminium market remains sensitive to smelter outages, power reliability and regional supply disruptions. Any faster-than-expected return of capacity can ease some pressure on primary aluminium availability.

Century had previously expected to restart the second potline by the end of April and return to near full production by the end of July. The early restart suggests the repair programme is progressing ahead of schedule.

Iceland Smelter Recovery Could Support 2026 Output

Nordural’s Grundartangi smelter produced 275,000t of aluminium in 2025. Century said in February that it expected the Icelandic operation to produce 215,000t in 2026, down by 21.8% from the previous year because of the potline outage.

The early restart may improve this year’s production outlook. However, the final impact will depend on how quickly Century can re-energise the remaining pots and stabilise operations.

Primary aluminium smelters are highly sensitive to power and electrical infrastructure reliability. A transformer failure can remove large volumes from supply because restarting pots requires careful sequencing and operational control.

The restart also matters for European aluminium users. Icelandic aluminium is part of the broader Atlantic supply base, and any disruption can influence regional availability, premiums and procurement planning.

Century’s ability to bring the potline back ahead of schedule helps reduce uncertainty. Still, the planned transformer replacement later this year means electrical resilience will remain a key operational focus.

Century Expands US and Iceland Aluminium Supply

Century’s Iceland restart comes shortly after the company began production from its Mt Holly expansion project in South Carolina. The Mt Holly project is expected to lift that smelter to 229,000 t/yr by the end of June.

The two developments strengthen Century’s position across both North American and Atlantic primary aluminium supply. Nordural restores disrupted Icelandic output, while Mt Holly adds domestic US production capacity.

This is strategically relevant as aluminium supply chains become more policy-sensitive. The US has moved to support domestic primary aluminium production through trade measures, while European buyers remain exposed to power costs, smelter outages and regional premium volatility.

Century is therefore improving supply availability from two directions. The company is recovering lost production in Iceland and expanding output in the US.

For the market, the restart provides near-term supply relief. For Century, it reduces the earnings impact of the October outage and supports a stronger production base heading into the second half of 2026.

The Metalnomist Commentary

Century’s Nordural restart shows how quickly aluminium supply risk can turn on electrical infrastructure reliability. In a tight primary aluminium market, restoring idled pots ahead of schedule can matter almost as much as adding new capacity.

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.

Global Aluminium Output Rises in January as China Breaks Production Record

China Aluminium

Chinese Smelters Drive Global Gains with New Highs in Yunnan and Inner Mongolia

Regional Output Trends Show Growth in Europe, Africa, and South America

Global aluminium production surged in January, hitting 6.25 million tonnes, as China’s output reached a historic peak, according to the International Aluminium Institute. The worldwide increase marked a 2.73% year-on-year rise, matching December’s revised all-time record.

China Leads Global Growth with New Monthly High

China, the world’s largest aluminium producer, delivered 3.74 million tonnes in January, up 3.74% from a year earlier. This new monthly record stems from unrestricted operations in Yunnan province and expanded capacity in Inner Mongolia. Robust domestic demand and strong industry profitability have prompted Chinese producers to maximize output since late 2023.

Regional Output: Europe, Africa, and South America Expand

European aluminium output, including Russia, increased by 3.29% to 597,000 tonnes. Africa posted the strongest regional gain, climbing 7.87% to 137,000 tonnes. South American production also grew by 3.15% to 131,000 tonnes, while North American output slipped by a marginal 2,000 tonnes to 337,000 tonnes.

Asia (excluding China) saw a slight annual gain, reaching 411,000 tonnes. The Middle East maintained steady production at 541,000 tonnes, and Oceania’s output declined 1.88% to 157,000 tonnes.

China’s leadership in the aluminium sector continues to set the pace for global supply. As new capacity comes online and profitability remains high, Chinese production will likely remain a decisive factor in world market trends throughout 2024.

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.

Henan Zhongfu Egyptian Aluminium Complex Plans Signal China’s Downstream Expansion

Henan Zhongfu Industrial

Henan Zhongfu Egyptian aluminium complex plans could create a major new downstream manufacturing base in the Suez Canal Economic Zone. The Chinese aluminium producer is planning to establish a $2bn facility in Egypt, strengthening its access to Middle Eastern, African and European markets.

The planned Henan Zhongfu Egyptian aluminium complex was discussed during a meeting between Egyptian prime minister Moustafa Madbouly and a delegation from the Chinese company. Egypt said it is ready to provide full support for the project as part of its wider push to advance industrial development.

The Henan Zhongfu Egyptian aluminium complex would cover 1mn m² in the East Port Said area of the Suez Canal Economic Zone. The project is expected to create about 3,000 direct jobs and become the first facility of its kind in the area.

Egypt Targets Higher-Value Aluminium Manufacturing

The project fits Egypt’s strategy to localise higher-value aluminium industries and reduce production gaps. Rather than focusing only on basic metal supply, the planned facility is expected to support downstream products for packaging, automotive and construction applications.

These markets are important because they consume rolled aluminium and other fabricated products with higher added value than primary metal. Packaging requires aluminium sheet and foil. Automotive applications increasingly use aluminium for lightweighting. Construction uses aluminium in profiles, panels, façades and structural systems.

The Suez Canal Economic Zone gives the project a strong logistical position. East Port Said can support exports into Europe, the Middle East and Africa, while also serving Egypt’s domestic industrial market.

For Egypt, the investment could strengthen manufacturing depth and attract more industrial supply-chain activity around aluminium products. It also supports the government’s goal of expanding value-added manufacturing rather than relying only on imported finished goods.

Chinese Aluminium Producers Seek Global Market Access

Henan Zhongfu already exports aluminium products to more than 45 countries. The Egyptian project could help the company move closer to customers and diversify production outside China.

This matters because aluminium trade is increasingly shaped by tariffs, logistics costs, regional content rules and industrial policy. Overseas processing bases can help Chinese producers reduce market-access risk while supporting global customer supply.

The project also reflects a wider trend among Chinese metals companies. Producers are moving from export-only models toward international manufacturing platforms, especially in regions with logistics advantages and policy support.

No detailed capacity figures or construction timeline have been disclosed. However, the scale of the proposed investment suggests that the facility could become a significant downstream aluminium platform if approvals, financing and execution proceed smoothly.

For aluminium markets, the project’s main significance lies in downstream capacity rather than primary supply. It could strengthen competition in rolled and fabricated aluminium products across packaging, automotive and construction sectors.

The Metalnomist Commentary

The Henan Zhongfu project shows how aluminium competitiveness is shifting toward regional manufacturing platforms. Egypt’s location gives the project strategic value, while China’s downstream know-how could help build a larger aluminium products hub around the Suez Canal.

Nalco Record Profit Highlights India’s Aluminium Market Strength

Nalco

Nalco record profit in FY2025/26 shows how stronger production volumes, higher aluminium prices and improved operating efficiency lifted India’s state-owned aluminium producer to a new earnings high. The company reported profit of 58.16bn rupees for the year to March, up 9.2% from a year earlier.

Nalco record profit was supported by revenue growth of 6.3% to Rs178.43bn. In the final quarter of the financial year, profit rose by 7% to Rs17.18bn, while revenue increased by 7.9% to Rs51.03bn.

Nalco record profit also reflects stronger market realisations. Three-month aluminium prices on the London Metal Exchange averaged $2,780/t through the financial year, up from $2,553/t in the previous year.

The result reinforces the importance of India’s aluminium value chain. Higher domestic metal sales and stable alumina output strengthen Nalco’s position as India expands infrastructure, power, transport, packaging and industrial manufacturing.

Record Aluminium Output Supports Domestic Demand

Nalco set new records for aluminium production and sales during the year. Cast aluminium production reached 472,000t, while aluminium sales totalled 474,000t.

Domestic sales reached a record 461,000t. This is strategically important because it shows that India’s internal aluminium demand remains strong enough to absorb most of Nalco’s output.

Aluminium consumption in India is tied to several structural growth sectors. Power transmission, construction, transport, packaging, electrical products and manufacturing all require more aluminium as industrial activity expands.

Higher domestic sales also reduce exposure to export volatility. For Nalco, a larger Indian customer base can improve sales stability when global trade flows are affected by tariffs, premiums or regional demand swings.

The production record also points to better operating execution. Higher volumes matter only when supported by plant reliability, cost discipline and stable raw material flows.

Nalco said stronger production, improved realisations and operating efficiency across business units drove the performance. That combination allowed the company to capture better market pricing while expanding output.

Alumina and Price Realisations Strengthen Earnings Base

Nalco also produced 2.3mn t of alumina hydrate and recorded 1.4mn t of alumina sales. Alumina remains central to the company’s integrated aluminium model.

Integrated alumina supply gives aluminium producers stronger cost control. It can also protect margins when external alumina markets tighten or when smelters face higher raw material costs.

The increase in LME aluminium prices was another major earnings driver. Higher benchmark prices improved realisations and helped lift profits even as cost pressures remained a risk across energy-intensive metal production.

For India’s aluminium sector, Nalco’s results show the value of scale and integration. Producers with bauxite, alumina and smelting capacity can benefit more directly when aluminium prices rise and domestic demand expands.

The company’s record performance also supports India’s broader industrial policy goals. Aluminium is essential for electrification, infrastructure, transport lightweighting, renewable energy equipment and downstream manufacturing.

Nalco’s challenge now is to sustain output discipline and margin strength if aluminium prices become more volatile. The market remains exposed to energy costs, global trade measures and supply disruptions.

The Metalnomist Commentary

Nalco’s record profit shows that India’s aluminium market is gaining strength from domestic consumption, not only export opportunity. The strategic advantage will belong to producers that combine integrated alumina supply, reliable smelting operations and exposure to India’s expanding industrial base.