Price trend

Aluminum prices initially strengthened in September but then weakened. According to the SunSirs commodity market analysis system, as of September 29, 2025, the average price of aluminum ingots in East China was 20,700 RMB/ton, up 0.31% from the average price of 20,636.67 RMB/ton on September 1.

The aluminum price had broken through the 20,000 RMB/ton mark and was at a relatively high level in the past 1-2 years. The price of raw material alumina had fallen from its high level, and the profit per ton of aluminum was in a relatively good position.

Overview of recent fundamentals

As of September 29, the electrolytic aluminum market was experiencing a triple threat: weakened cost support, a slight inventory buildup, and a limited pre-holiday demand recovery. Cost, supply, demand, and inventory were all interacting and driving short-term market trends. The specific situation was as follows:

Cost side: Overall loosening dragged down aluminum prices, while some varieties rose slightly

Alumina: Oversupply drove price decline. The weakening of alumina spot prices stemed from oversupply in the market. Spot prices in Shanxi and Henan provinces had fallen below full cost, exacerbating profitability pressures for companies. While seven alumina plants in Guangxi maintained normal production, typhoon-affected port shipments were disrupting shipments, creating minor short-term disruptions to localized supply. However, the overall oversupply situation remained difficult to overcome.

Bauxite: Increased imports eased pressure on raw materials. Support for upstream raw materials had improved. In August, domestic bauxite imports reached 18.2898 million tons, a year-on-year increase of 17.65%. The significant increase in import volume had effectively eased the tight pressure on domestic raw material supply; in the international market, the FOB price of Guinea bauxite fell to US$74/dry ton, further reducing import costs and alleviating the raw material costs of downstream electrolytic aluminum companies to a certain extent.

Prebaked anodes and thermal coal: Localized price increases were unable to offset overall cost easing. While prices of prebaked anodes and thermal coal had risen, the extent of these increases had been limited. Recent upward trends in thermal coal prices had been sluggish, and had failed to offset the weakening prices of key raw materials such as alumina and bauxite. As a result, overall electrolytic aluminum production costs were showing signs of easing, and their support for aluminum prices continued to weaken.

Supply side: production capacity remained stable at a high level, and incremental pressure continued to be released

Domestic electrolytic aluminum supply remained high, with new projects entering production in an orderly manner. For example, 490,000 tons of production capacity at Qinghai Chalco had been commissioned, while 1.06 million tons of capacity remained in reserve, indicating a clear outlook for future supply increases. Regarding production cuts, short-term reductions were limited, with only 400,000 tons at Qinghai Chalco and 25,000 tons at Henan Yugang being implemented. In Yunnan, electrolytic aluminum producers had officially increased electricity prices by 0.12 yuan per kWh, resulting in a weekly production reduction of 80,000 tons. The resumption of production was largely complete, with 545,000 tons of the 565,000 tons of capacity initially planned to resume production already having resumed. Overall supply pressure persisted.

Demand side: Pre-holiday stocking drove local recovery, but overall performance still fell short of expectations

As the holiday approached, downstream market demand for stocking up saw a slight release, driving a recovery in demand in some sectors: The processing fee for aluminum bars in Guangdong remained stable at 300 RMB/ton, with prices remaining firm; the national average price of aluminum rod remained at 275 RMB/ton, with market transactions accelerating; and procurement activity in the cast aluminum alloy sector increased, with orders increasing slightly. However, overall demand performance still fell short of expectations, with exports in particular experiencing a significant drag. In August, aluminum sheet and strip exports decreased by 10.49% year-on-year, and aluminum foil exports decreased by 24.33%. Weak overseas demand has significantly constrained domestic electrolytic aluminum consumption.

Market outlook

Overall, as of September 29, the electrolytic aluminum market was driven by weakening cost support and the release of incremental supply. While pre-holiday stockpiling was providing some support to demand, the overall impact was limited. Aluminum prices are expected to remain weaker in the short term, with limited upside potential.

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