Aluminum prices rose initially and then fell in November 

Aluminum prices rose initially in November before falling. According to the SunSirs commodity market analysis system, as of November 27, 2025, the average price of aluminum ingots in the East China market was 21,473.33 RMB/ton, an increase of 0.85% compared to the average price of 21,293.33 RMB/ton on November 1; and a decrease of 2.10% compared to the average price of 21,933.33 RMB/ton on November 13.

Aluminum prices had broken through the 21,000 RMB/ton mark, reaching 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.

Supply side: Rigid production capacity became apparent, with limited incremental capacity

Domestically: As of November, the operating capacity of electrolytic aluminum remained at 44.135 million tons, with the operating rate approaching the capacity ceiling (the domestic electrolytic aluminum built-up capacity was about 45.84 million tons, with 1.345 million tons of new capacity already put into operation in 2025, and only 1.23 million tons to be put into operation), indicating a slowdown in long-term supply growth; in the short term, there may be new capacity planned to be put into operation in Xinjiang, which is expected to bring a small increase in supply, but the impact on the overall situation is limited.

Overseas: Supply disruptions persisted. Iceland's Grundartangi aluminum smelter (capacity 320,000 tons/year) reduced production by about two-thirds due to electrical equipment failure (affecting capacity 200,000 tons/year), while Mozambique's aluminum smelter faced the risk of power contract expiration (potentially shutting down 520,000 tons of capacity after March 2026). Insufficient overseas supply elasticity supported the risk premium of global aluminum prices.

Cost side: Temporary easing, but long-term upward pressure remained

Costs decreased slightly: Last week, the theoretical production cost of electrolytic aluminum decreased slightly due to the reduction in alumina prices, which partially alleviated the cost pressure on enterprises.

Energy cost concerns: Thermal coal prices fell first and then rose, and there is a possibility of an increase in thermal power prices; at the same time, with the dry season approaching, hydropower prices are facing upward pressure, which may drag down corporate profits in the future.

Profitability: Despite the decline in costs, aluminum prices also fell, resulting in a slight narrowing of the theoretical profit margin for electrolytic aluminum last week compared to the week before last. However, the industry still maintained strong profitability (weekly average profit of approximately  5,806 RMB/ton).

Demand side: Structural differentiation, with emerging fields becoming the core driving force

Demand for aluminum in construction (aluminum profiles, aluminum formwork, etc.) was sluggish. The new construction area of real estate in January-October decreased by 19.8% year-on-year. The lag in completions meant that there was little chance of a short-term boost. The weekly operating rate of aluminum profiles dropped to 52.1% (down 0.5% week-on-week), with orders for construction profiles remaining weak. 

New energy vehicles: In October, the sales share of new energy vehicles exceeded 50% for the first time (reaching 51.6%). Under the trend of lightweighting in the industry, the average amount of aluminum used per new energy vehicle in China approached 245 kg by 2025. The demand for aluminum for body panels, battery boxes and other components continued to be driven, and the operating rate of automotive profiles remained relatively high.

Power infrastructure: Steady progress in power grid investment and ultra-high-voltage (UHV) construction provided stable support for demand for aluminum stranded wire and aluminum conductors. The operating rate of aluminum cables remained at 63.4%, supported by orders, becoming a "ballast" for aluminum consumption.

Photovoltaics: The long-term growth logic was solid, but there were no significant project developments in the short term. Module production is declining month-on-month (estimated at 42.64GW in November, a month-on-month decrease of 3.18%), resulting in a relatively moderate increase in demand for aluminum frames and brackets.

Market Forecast: Short-term fluctuations, long-term bullish trend

In the short term, the electrolytic aluminum market is facing a mix of bullish and bearish factors, with macroeconomic headwinds and fundamental support creating a stalemate.

Negative factors: Cooling expectations of a Fed rate cut in December, a stronger dollar, increased supply from new production capacity in Xinjiang, and continued high prices suppressing downstream processing.

Positive factors: Domestic consumption stimulus policies remained expected, strong new energy vehicle data provided long-term confidence, and overseas supply disruptions (such as low German natural gas storage capacity, which may push up energy costs) supported international aluminum prices.

Expected price range: 21,100-22,000 RMB/ton for electrolytic aluminum. Attention should be paid to overseas monetary policy trends and the pace of domestic inventory reduction.

In the long run, the price of electrolytic aluminum is expected to rise in 2026, making it more likely to increase than decrease.

On the supply side: the domestic capacity ceiling of 45 million tons was stable, and the overseas increase mainly comes from Indonesia (new capacity of 1.22-1.67 million tons, but some capacity was shut down to offset it). The global electrolytic aluminum supply was significantly rigid, and any unexpected supply disturbances may push up prices.

On the demand side: the decline in traditional sectors (real estate) narrowed, while demand in emerging sectors (new energy vehicles, photovoltaics, AI-related power facilities) continued to grow. The strategic emerging industries such as aerospace and low-altitude economy in the "15th Five-Year Plan" opened up medium- and long-term demand space.

On the cost side: Alumina prices were generally weak, but there is an upward risk in electricity costs (coal prices may rise under the "anti-involution" policy). The electrolytic aluminum industry maintained strong profitability, supporting the bottom of prices.

Expected range: Electrolytic aluminum prices are expected to rise in 2026, with a trading range of 19,800-24,500 RMB/ton.

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