According to China Nonferrous Metals News, aluminum prices have shown limited pullbacks since breaking through the 22,000 RMB/ton mark in mid-November. With robust market fundamentals providing solid support, prices are expected to maintain an upward trajectory.

As of October 2025, China's operational electrolytic aluminum capacity reached 44.434 million tons, approaching the production ceiling. This indicates extremely limited room for future capacity expansion, providing robust support for aluminum prices from the supply side. From a medium-to-long-term perspective, with capacity ceilings difficult to breach, electrolytic aluminum supply is expected to stabilize around 45 million tons.

The current proportion of aluminum ingots is relatively low. In October, China's primary aluminum output reached 3.7421 million tons, a year-on-year increase of 1.13%. Among this, molten aluminum accounted for 77.7%, while aluminum ingots constituted only 22.3%. Since aluminum futures require delivery in the form of ingots, the low ingot ratio implies limited deliverable resources, creating conditions for a low inventory structure.

The policy-imposed production capacity ceiling constrains primary aluminum supply growth, while the current product structure dominated by molten aluminum results in a low proportion of deliverable aluminum ingots. Together, these factors form the supply-side support for rising aluminum prices.

Real Estate Under Pressure, Strong Growth in New Energy Sector

Primary demand for primary aluminum centers on three sectors: construction, transportation, and power generation. In the construction segment, the real estate market remains in recovery. Data shows that from January to October, nationwide commercial property sales area declined 6.8% year-on-year, while completed floor space fell 16.9%. Despite successive government support policies for real estate since 2022, pandemic impacts and economic cycles have kept homebuyer sentiment cautious.

The transportation sector delivered standout performance. In October, automobile production and sales increased by 12.1% and 8.8% year-on-year, respectively. From January to October, cumulative automobile production and sales both grew by over 12% year-on-year. Regarding exports, automobile exports rose by 22.9% year-on-year in October, while cumulative automobile exports from January to October increased by 15.7% year-on-year.

Notably, to pursue weight reduction, new energy vehicles extensively utilize aluminum alloy components. A single vehicle can use 220 to 300 kilograms of aluminum, higher than the 150 to 200 kilograms used in fuel-powered vehicles. In October, new energy vehicle production and sales increased by 21.1% and 20% year-on-year respectively, accounting for 51.6% of total vehicle sales. From January to October, cumulative production and sales both grew by over 32% year-on-year, with a penetration rate reaching 46.7%. Regarding exports, new energy vehicle exports surged by 99.9% year-on-year in October. From January to October, cumulative exports grew by 90.4% year-on-year.

Additionally, aluminum alloys are required for manufacturing photovoltaic cell frames and mounting brackets. From January to October, cumulative new photovoltaic installed capacity reached 252.87 GW, a year-on-year increase of 39.48%. In October, new installations reached 12.6 GW, a month-on-month increase of 30.43%.

Overall, the robust growth of the new energy vehicle and photovoltaic industries has effectively offset the negative impact of the real estate downturn on primary aluminum consumption. Simultaneously, the application scenarios for primary aluminum continue to expand, with increased aluminum usage in sectors such as energy storage, robotics, low-altitude economy, smartphones, and winter sports equipment. From a medium-to-long-term perspective, primary aluminum will exhibit a pattern of “stable supply and growing demand.”

In summary, the supply side provides solid support for primary aluminum prices, with a relatively low proportion of aluminum ingots. On the demand side, despite weakness in the real estate sector, the rapid development of emerging industries like new energy vehicles and photovoltaics has effectively driven primary aluminum consumption. Overall, the fundamentals of the aluminum market remain robust, and prices are expected to maintain a relatively strong upward trend.

As an integrated internet platform providing benchmark prices, on December 1st, the benchmark price of aluminum on SunSirs was 21,460.00 RMB/ton, an increase of 0.78% compared with the beginning of the previous month (21,293.33 RMB/ton).

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