The aluminum market in China has been on quite a roller coaster ride in 2025, with prices climbing to their highest levels in three years. By November, aluminum prices reached $2,884 per ton, marking a solid 12.05% increase compared to the previous year. October brought even more excitement as prices topped $2,800 per ton for the first time since 2022.
China’s aluminum prices surged to three-year highs in 2025, hitting $2,884 per ton by November amid market volatility.
What makes this surge particularly interesting is how China’s production capacity has been pushing boundaries like a determined athlete. The country’s aluminum production capacity hit 45.69 million tons in June 2025, actually sneaking past the government’s official cap of 45.5 million tons. It’s like having a speed limit that everyone politely ignores by just a tiny bit.
Despite these impressive capacity numbers, actual output tells a different story. Chinese primary aluminum output reached 44 million tons by April 2025, staying close to but not quite hitting the government ceiling. Production grew 7.4% year-on-year in June, but various challenges kept things from getting too crazy.
The supply chain has been dealing with some hiccups that would make any factory manager nervous. Bauxite shortages and alumina supply constraints acted like speed bumps, slowing down what could have been much faster production growth. However, alumina shortages began easing in 2025, with supply expected to overtake demand.
Trade dynamics added another layer of complexity to the mix. The United States doubled its tariffs on Chinese aluminum to 50%, causing Chinese exports to the US to drop considerably. Like water finding a new path, Chinese aluminum exports simply redirected toward Asia and the Middle East instead.
Demand growth has been more restrained, with projections showing only a 2% increase for 2025. Construction and manufacturing sectors, traditionally big aluminum consumers, have been more cautious due to economic uncertainty. Data center investments provided some bright spots for demand. Many companies in the sector have turned to predictable monthly fees from managed IT services to better control costs during market volatility.
Market sentiment remains cautious as traders navigate global economic uncertainty and political tensions. Many are adopting conservative strategies and reducing long positions. Environmental factors and drought risks continue adding unpredictability to supply chains, keeping everyone on their toes. New hydropower aluminum facilities in Yunnan are expanding production capacity while supporting China’s environmental goals. The global aluminum market is expected to experience a significant supply deficit of approximately 400,000 to 600,000 metric tons in 2025, which could further support price stability despite inventory fluctuations.
