In 2025, driven by macroeconomic factors and sector-wide resonance, aluminum prices first entered a period of relatively strong range-bound fluctuations. By the end of March, as prices reached the previous upper boundary of the range, they began to fluctuate downward. At this very moment, the Trump administration in the United States launched a "trade war" characterized by continuously escalating tariffs, plunging global markets into panic. China happened to be in the Qingming holiday period; on the first trading day following the holiday, aluminum prices opened sharply lower. Subsequently, as macroeconomic sentiment eased, prices gradually began to recover, a trend that continued until the end of September. Entering October, boosted by favorable macroeconomic conditions, a sharp rise in copper prices, and a significant increase in the copper-to-aluminum price ratio, an upward trend started to take shape. By late October, capital began flowing heavily from the copper market into the aluminum market, and Shanghai aluminum prices entered a phase of accelerating upward movement. From this point onward, the upward potential for Shanghai aluminum prices was fully unleashed.

After peaking in December 2014, alumina prices began a significant downward trend as supply from mining sources improved, new production capacity came online, previously shut-down capacity resumed operations, and investor sentiment cooled. This downward trend continued until April. Thereafter, influenced by macroeconomic developments and supported by rising costs, alumina prices entered a period of bottom-range fluctuations. By May, however, following a series of disruptions to bauxite mining rights imposed by the Guinean government, market participants started expressing concern about future bauxite supplies, prompting a rebound in alumina prices. As of now, although several major mines remain shut down, market sentiment has begun to ease, and with ongoing increases in production capacity, alumina prices have once again returned to a weak trading pattern.

The cast aluminum alloy was newly launched in mid-2025, and its overall trend is in sync with that of Shanghai aluminum; it has not yet developed its own independent market performance.

Global bauxite production is steadily increasing

Since 2024, the global bauxite supply landscape has undergone a significant shift, with Guinea having risen to become the world's largest bauxite producer. Meanwhile, China's domestic bauxite production has also seen a modest increase. From the current global supply perspective, Guinea's bauxite supply continues to maintain a relatively rapid growth momentum. Its high ore grade, ease of extraction, and low production costs have made its mineral resources highly sought after. Given China's enormous demand and the fact that its domestic mines are nearing exhaustion, Chinese companies have been actively investing in the development of Guinea's bauxite resources in recent years. However, Guinea's turbulent political situation and relatively underdeveloped infrastructure continue to pose challenges to China's imports of bauxite from Guinea. The Guinean government's revocation of several bauxite mining licenses, the ban on exports from a major mine, and disruptions to mining and transportation caused by the rainy season have all become key factors hindering the long-term stability of Guinea's bauxite exports.

China's imports of bauxite will continue to grow

This year, China's imports of bauxite have continued to expand, with Guinea and Australia being the main sources. Among these, Guinea has shown the most significant increase. In recent years, China's bauxite imports from Guinea have generally maintained a growth rate of around 20%, and this year, the increase in China's imports from Guinea has already reached nearly 40%. Currently, bauxite imports from Guinea account for approximately three-quarters of China's total bauxite imports. It is projected that by 2026, bauxite from Guinea will account for about 75% to 80% of total imports.

Overall, as China's domestic bauxite resources become increasingly depleted, more and more alumina plants are relying on imported ore. As Chinese companies increasingly expand their mining operations overseas, China's dependence on foreign bauxite resources will continue to grow. Therefore, in the long term, China's bauxite imports will remain on an upward trend; however, it is also important to pay attention to short-term disruptions caused by factors such as soaring shipping costs and geopolitical tensions. Often, these unexpected developments can serve as the trigger for short-term market fluctuations.

China's bauxite production continues to decline

Due to environmental concerns and the depletion of mineral resources, bauxite mining in China has seen numerous production halts and suspensions in recent years, leading to a downward trend in output. In the second half of this year, short-term disruptions have eased somewhat, but the long-term trend remains unchanged. It is expected that by 2026, bauxite production will continue to decline slightly, with annual output hovering around 50 million tons.

In the long term, China's policies related to bauxite mining have been tightening year by year, primarily due to regulatory oversight from environmental protection and safety production policies. Additionally, China's mineral reserves are declining at a rate of about 3% per year. As downstream demand for alumina continues to grow, China's dependence on foreign sources for minerals in the aluminum industry chain is also steadily increasing; it is projected that by 2026, China's reliance on foreign bauxite supplies could exceed 75%.

The trade surplus of alumina continues to grow

In 2025, as alumina prices declined, alumina exports surged. The primary reason is the changes brought about by geopolitical issues. Since the Russia-Ukraine conflict, Russian buyers have been continuously seeking alumina supplies from China. Given the current development of the situation and the ongoing sanctions, China's alumina exports are expected to continue increasing in the future.

Alumina production shows significant growth

Looking at data from the past two years, in 2024, China's alumina production increased by 3.6% year-on-year, representing a noticeable improvement compared to the 1.4% increase in 2023. In 2025, as more alumina production resumes and new capacity comes online, the growth rate of output will further accelerate. In the first 10 months of this year, cumulative production has already risen by 8% year-on-year. Moreover, in 2026, an additional 13.9 million tons of capacity remains to be commissioned. Assuming no other disruptive factors, and given the current level of supply from mining sources, alumina production in 2026 is expected to maintain an annual growth rate of around 5%.

Alumina inventories remain at high levels

Alumina inventories have been on a downward trend since 2020. Although inventories showed some recovery after the start of 2024, they began declining again in the second quarter and continued to hit new lows. This has been a major factor behind the sustained strength in alumina prices in 2024. Since the end of January 2025, alumina inventories have shown a significant rebound. According to data from BaiChuan, as of November 21, total alumina market inventories stood at 194,000 tons, while factory inventories totaled 1.803 million tons—combined, these amounted to 1.997 million tons, representing a 23.6% increase compared to the same period in 2024. Looking ahead to 2026, as demand gradually reaches its peak while supply still has room for further release, alumina inventories are expected to remain at high levels.

Imports of primary aluminum continue to grow

Aluminum exports may continue to decline

Since 2024, China's imports of primary aluminum have grown significantly year-on-year. This is due, first, to the continued high level of the Shanghai-London ratio, and second, to geopolitical changes that have led to a large influx of Russian aluminum ingots into the Chinese market. Looking ahead, as trade between China and Russia continues to expand, primary aluminum imports are expected to remain at a high level.

"In 2023, as monetary policies tightened in Europe and the U.S., economies entered recession, and end-demand weakened, China's aluminum exports also showed a downward trend. After 2024, aluminum exports began to improve significantly. However, as global trade barriers deepened, many countries launched ‘double anti-dumping' investigations into Chinese aluminum products. Since 2025, following Trump's assumption of office, the U.S. government has imposed comprehensive additional tariffs on aluminum and aluminum products. Under the influence of multiple adverse factors, China's aluminum exports are expected to continue to be affected in 2026."

Primary aluminum production capacity remains at a high level

In 2025, China's electrolytic aluminum production growth rate slowed down compared to 2024, and as operating capacity gradually reaches its peak, this growth is expected to continue slowing in 2026. The change in operating electrolytic aluminum capacity was relatively drastic from 2020 to 2023, while total capacity showed a gradual upward trend. From 2024 to 2025, due to continuously rising profits from electrolytic aluminum smelting, operating capacity reached its recent peak.

According to statistics from Bai Chuan Information, as of November 20, China's theoretical installed capacity for electrolytic aluminum (calculated based on facilities with production capabilities) reached 47.769 million tons, with an actual operating capacity of 44.135 million tons, representing an operating rate of 92.39%. In 2026, it is projected that 1.78 million tons of electrolytic aluminum capacity nationwide will undergo planned reductions, while an additional 2.414 million tons of newly commissioned capacity remain to be put into operation.

The center of gravity for social aluminum ingot inventories continues to shift downward.

Looking at the social aluminum ingot inventories over the past five years, we can see that inventory levels have generally shown a trend of year-on-year decline, with the center of gravity shifting downward annually. The peak inventory level in 2024 was significantly lower than the peaks recorded from 2021 to 2023, and this trend will be even more pronounced in 2025. The post-Spring Festival inventory peak is now among the lowest in recent years, and the duration of high inventory levels has also been relatively short. The primary reason for the reduced amplitude of year-round inventory fluctuations is the increasing proportion of molten aluminum and the corresponding decline in ingot casting volumes. As a result, prices have become much less sensitive to inventory changes, and in the future, prolonged periods of low inventory levels will likely become the new normal in the industry. Looking ahead to 2026, we expect inventories to continue experiencing two seasonal accumulation phases during the off-season, with the year's peak occurring after the Spring Festival.

Recycled aluminum alloy production increases year by year

Data from the Renewable Metals Branch of the China Nonferrous Metals Industry Association show that in 2023, China's capacity for recycled cast aluminum alloys reached 12.2 million tons, with an average annual compound growth rate of 6.35% since 2012; production reached 5.8 million tons, with an average annual compound growth rate of 5.12% since 2012; among them, the output of ADC12 cast aluminum alloy ingots was approximately 4.35 million tons, accounting for 75% of the total recycled cast aluminum alloy production.

Finished aluminum alloy inventories remain at high levels

Since 2024, aluminum alloy ingot inventories have shifted from accumulating to destocking. In 2025, aluminum alloy ingots entered a period of inventory accumulation in sync with aluminum ingots. However, after mid-May, as downstream demand is about to enter the off-season, inventories began to accumulate again. Overall, aluminum alloy inventories exhibit certain seasonal characteristics; typically, during the mid-year period—due to the traditional off-season—inventories tend to be relatively high for the entire year. Yet in 2025, once the off-season arrived, the rise in inventories became particularly pronounced, reaching new highs not seen in recent years. It is expected that this upward trend will continue into early 2026.

The real estate industry continues to linger at the bottom

In 2025, China's real estate market will remain in a period of deep adjustment, characterized by 'overall pressure and marginal, subtle changes.' On the supply side, core indicators such as investment, new construction starts, construction in progress, and completions all showed double-digit declines, reflecting an extremely weak willingness among property developers to invest and indicating continued industry contraction. On the demand side, both the sales area and sales value of commercial housing experienced simultaneous declines in volume and price, and market confidence remains to be restored. Overall, the market is still searching for its bottom, and a full recovery depends on improvements in the macroeconomy and more targeted policy support.

New energy vehicle growth may shift gears and slow down

According to the latest production and sales data, in 2025, driven by favorable factors such as the intensified and expanded trade-in policy and the accelerated implementation of enterprises' innovative achievements, the passenger car market will continue to perform well. The primary drivers of this growth are automobile price reductions and consumption-stimulating policies like tax and fee exemptions. In addition, the rapid development of new-energy vehicles is also boosting the overall growth of the automotive industry. From a long-term perspective, the period of rapid growth for new-energy vehicles will eventually come to an end, and the growth rate of production and sales will shift from fast to slow. However, the incremental contribution of new-energy vehicles will remain the most important factor in downstream aluminum consumption. It is expected that in 2026, the growth rate of new-energy vehicle production and sales will be between 15% and 20%.

The home appliance industry's growth is slowing down

In 2024, the performance of the three major home appliance industries was relatively strong. Thanks to the favorable impact of the 'trade-in' policy, cumulative year-on-year growth remained at a high level. In 2025, although the policy benefits continue, the cyclical nature of durable consumer goods replacement and upgrading has begun to show signs of slowdown. From a data perspective, the three major home appliance industries have seen a deceleration in growth momentum, with noticeable differentiation among product categories. For instance, washing machines and refrigerators experienced significant production growth in August, while air conditioners entered the off-season, with production declining month-on-month. Looking at the first ten months of this year as a whole, overall growth has slowed somewhat. It is expected that, provided the policy benefits remain steady, the home appliance industry will be able to maintain positive growth levels in 2026.

Power grid investment and construction are growing rapidly

In 2025, the State Grid's annual investment scale exceeded 650 billion CNY for the first time, with a focus on ultra-high-voltage and digital upgrades. Throughout the year, the plan is to complete a total of seven UHV projects—two AC and five DC lines. Among these, ±800 kV DC lines such as Longdong-Shandong, Hami-Chongqing, Ningxia-Hunan, and Jinshang-Hubei, as well as 1,000 kV AC lines including Sichuan-Chongqing and Datong-Tianjin South, have been put into operation one after another, adding approximately 56 million kilowatts of new transmission capacity. Meanwhile, eight ongoing "three AC and five DC" projects are being advanced simultaneously, boosting the localization rate of core equipment such as flexible DC converters and converter valves, and supporting the transmission demand of 150 GW from large-scale wind and solar power bases in western China.

The photovoltaic industry is transitioning from a period of rapid growth

Latest data shows that from January to October, the country's cumulative newly installed photovoltaic capacity reached 252.87 GW, a year-on-year increase of 39.48%.

"In recent years, the ultra-rapid growth of photovoltaic (PV) installations has led to an overcapacity situation in the industry. As PV module prices have fallen, the profitability per watt for companies has declined significantly. By 2026, the industry will face resource integration, and capacity growth will become more orderly. According to forecasts by the European Photovoltaic Association, global new PV installations will reach 665 GW in 2026. Wood Mackenzie predicts that, under the scenario of accelerating marketization of electricity trading in China, the growth rate of PV installations in China will slow down markedly from 2026 to 2034, with annual average installed capacity falling to 312 GW during this period. Assuming that each gigawatt of PV installations consumes approximately 19,000 tons of aluminum, global new aluminum demand from PV installations is expected to reach 12.635 million tons in 2026, with China accounting for around 5.928 million tons."

Overall, in 2025, the tight supply situation in the upstream of the aluminum industry chain will ease somewhat. Mineral ore imports are increasing, and disruptions to domestic mine production remain relatively limited. Alumina enterprises continue to operate at high capacity utilization rates, with several new and resumed production capacities coming online one after another. However, as spot prices for alumina have plummeted sharply, profits have significantly contracted—and some high-cost production facilities have already begun shutting down for maintenance. Going forward, the interplay between idled capacity and newly commissioned or resumed capacity will become the key factor influencing alumina prices. In the primary aluminum smelting segment, thanks to declining costs and a substantial increase in profits, enterprise operating rates have risen accordingly, and currently operating capacity is running at near full load. This trend is expected to persist into 2026. On the demand side, operating rates among downstream processing industries show clear divergence: traditional sectors such as architectural profiles, plates, strips, and foils are performing moderately, while sectors like cables, alloys, and industrial profiles are showing relatively strong performance.In terms of end-demand, industries related to new energy and grid infrastructure construction continue to maintain robust growth. Although the growth rate of new-energy vehicle production and sales is expected to slow down in 2026 as subsidies gradually phase out, grid infrastructure construction will still sustain a relatively high growth level during the new cycle of the 15th Five-Year Plan. However, there are certain hidden concerns regarding inventory: the industry's continuous low ingot production has caused the inventory center of gravity to keep shifting downward, and the low inventory levels have reduced the price buffer capacity—this is clearly evident in the increased trading activity on the futures market whenever delivery approaches.

Looking ahead to 2026, the complexity and severity of the global macroeconomic environment will continue to exert a significant impact on trends in the nonferrous metals market. In addition, potential changes in Guinea's mineral policies could further disrupt the market, introducing uncertainty into aluminum prices. The pattern of diverging demand is expected to intensify further, with growth in emerging industries potentially offsetting, at least in part, the decline in demand from traditional sectors. As aluminum's financial attributes continue to strengthen and its linkage with other nonferrous metals such as copper becomes increasingly close, Shanghai aluminum prices are likely to maintain their strong performance. Trends in other segments of the industrial chain, however, are expected to diverge: cast aluminum alloys, driven by rising demand from sectors such as new-energy vehicles, are forecast to rise in tandem with aluminum prices; meanwhile, alumina, affected by supply-demand mismatches, will likely remain in a low-price range that will be difficult to reverse in the short term. In terms of price ranges, aluminum prices in 2026 are expected to mainly fluctuate between 20,000 and 25,000 CNY per ton, alumina between 2,000 and 3,000 CNY per ton, and cast aluminum alloys between 20,000 and 24,000 CNY per ton.

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