This week (June 8–12), the global aluminum market exhibited a divergent pattern: strong overseas performance contrasted with a weaker domestic market. Driven by geopolitical conflicts in the Middle East and production cuts abroad, international aluminum prices continued to surge; LME three-month aluminum futures hit a nearly four-year high, overseas inventories fell to historic lows, and the global supply deficit widened further. Domestically, prices for electrolytic aluminum and aluminum products fluctuated at high levels, with the industry maintaining high operating rates and profitability. Leveraging a comprehensive industrial chain, aluminum product exports continued to surge, serving as a key market highlight. Declining domestic raw material costs, combined with overseas price premiums, kept profit margins for aluminum enterprises high. Meanwhile, steady demand from downstream sectors—such as new energy and overseas infrastructure—fueled a continued rise in overall industry prosperity.

I. Domestic and International Spot Price Trends and Regional Market Conditions

International aluminum prices rose sharply this week, while domestic prices fluctuated around the 24,000 yuan/tonne mark, causing the price spread between domestic and international markets to widen further. In the international market, LME three-month aluminum futures peaked at $3,787.5/tonne—a nearly four-year high. A distinct pattern of high spot premiums emerged overseas, and the spread between near-term and far-term LME aluminum contracts widened significantly, reflecting heightened market concerns regarding short-term supply shortages.

The domestic spot market remained generally robust, with mainstream spot quotes for electrolytic aluminum ranging from 24,000 to 24,500 RMB/ton. Prices dipped slightly early in the week and saw some intraday pullbacks, but strong underlying support led to a gradual stabilization and recovery from midweek through the weekend. Regionally, East China—a core trading hub—saw active spot trading with quotes closely aligned with the mainstream range. North and South China experienced narrower price fluctuations, driven by local processing demand, with regional price spreads remaining at normal levels. Prices for processed aluminum products tracked raw material trends; quotes for aluminum sheet, strip, foil, and alloys remained stable, while high-end, deeply processed products demonstrated greater price resilience due to strong order volumes. Speculative sentiment in the spot market remained subdued throughout the week, with trading driven primarily by essential demand and the fulfillment of long-term contracts.

II. Domestic Capacity, Production, and Operating Rates

Domestic operating capacity for electrolytic aluminum remained high this week, with the industry's capacity utilization rate at an elevated level. Total domestic capacity is nearing the existing policy cap, and the pace of bringing new capacity online has been slow. Overall production remained stable; there were no instances of mass shutdowns or large-scale maintenance, indicating strong rigidity on the supply side.

The aluminum processing sector saw robust production and sales. Manufacturers of mainstream products—such as plates, strips, foils, and wire rods—maintained high operating rates, with most production lines running at full capacity and some companies operating with near-zero inventory. Strong orders from downstream sectors—including power batteries, energy storage, and consumer electronics—drove steady output of aluminum profiles and high-end aluminum alloys. Although industry-wide production schedules have not yet returned to historical peaks, the outlook for new orders in June and July is positive, with leading processors reporting month-on-month order growth. The recycled aluminum industry operated steadily; leveraging its low-carbon advantage, the production and export of recycled aluminum products proceeded smoothly, serving as a vital supplementary supply source for the industry.

III. Inventory Status

Global inventory trends showed significant divergence. Overseas, LME aluminum inventories fell to just over 320,000 tons—a nearly twenty-year low. Raw material inventories at overseas processing plants were generally low, highlighting a tight spot supply situation and further driving up overseas prices and premiums.

Domestic inventories steadily declined, with substantial aluminum exports effectively absorbing local stock. Social inventories and port stocks of both electrolytic aluminum and aluminum products remained within reasonable ranges, with no issues regarding supply backlogs. Overall domestic inventory pressure remained manageable, and there were no regional supply shortages, reflecting a healthy balance between supply and demand. Rising shipping risks in the Strait of Hormuz heightened anxiety regarding overseas restocking, indirectly prompting overseas buyers to increase purchases of Chinese aluminum products, which further contributed to the decline in domestic inventories.

IV. Domestic and International Demand Performance

(I) Domestic Demand

Domestic demand was supported by multiple drivers, with both traditional and emerging sectors contributing to growth. Demand for aluminum in sectors such as new energy vehicles (NEVs), energy storage, and photovoltaics continues to expand, serving as a core driver of growth for electrolytic aluminum and high-end aluminum products; meanwhile, essential demand in areas like power infrastructure and lightweighting applications remains stable. Aluminum consumption in traditional construction and general machinery holds steady at normal levels—providing a solid baseline of support despite the absence of explosive growth. Mid- and downstream processing enterprises are scheduling production based on actual demand and prioritizing long-term contracts for raw material procurement, with little speculative restocking activity in the short term.

(II) Overseas Demand

A significant surge in overseas demand has been the primary driver of this week's market. Geopolitical conflicts in the Middle East have caused a reduction of over 2.5 million tonnes in local aluminum production capacity—with a recovery period estimated at 3 to 12 months—compounded by production halts at certain African aluminum firms. Consequently, the global primary aluminum supply gap continues to widen; data from the World Bureau of Metal Statistics indicates a global primary aluminum deficit of 363,700 tons in the first quarter of 2026. Restocking demand in Europe and the Americas is robust, while steady progress on infrastructure and power projects in Southeast Asia and Africa is driving strong demand for products such as aluminum plates, strips, and profiles. Although there is no widespread global shortage, regional supply tightness is acute, leading to a continued shift of overseas procurement orders toward the domestic market.

V. Import/Export Data and Foreign Trade Outlook

This week saw a continuation of the strong export growth trend observed earlier; the significant price spread between domestic and international markets has created profitable opportunities for aluminum exports, with per-ton export profits remaining above 3,000 RMB. From January to April 2026, cumulative domestic exports of unwrought aluminum and aluminum products totaled 2.053 million tons, an increase of 8.9% year-on-year. Specifically, April exports reached 598,000 tons—a new monthly high in over a year—marking a 15.4% year-on-year increase.

While direct exports of domestic primary aluminum remain restricted, downstream aluminum processed products have become the mainstay of exports; high-value-added products—such as aluminum components for photovoltaics and NEVs, as well as aluminum profiles for 3C electronics—have performed impressively in overseas markets. Domestic enterprises are accelerating their global expansion, with overseas production capacities coming online in an orderly manner, further solidifying their export advantages. Industry forecasts conservatively estimate that total aluminum product exports for 2026 will surpass the previous year's levels. Regarding imports, arrivals of primary aluminum and aluminum products from overseas remained steady, exerting limited impact on the domestic market.

VI. Upstream-Downstream Dynamics and Industry Profitability

This week, electrolytic aluminum costs continued to decline as alumina and electricity prices softened, further boosting industry profits. In May, the average profit per ton of domestic electrolytic aluminum reached RMB8,413—a year-on-year surge of 126.4%—with the entire industry's operating capacity remaining profitable. Fluctuations in upstream raw material prices exerted limited downward pressure on aluminum prices, while the cost floor remained solid.

Performance in the midstream aluminum processing sector was mixed; profit margins for low-end processed goods were modest, whereas high-end aluminum alloys, aluminum foil, and precision profiles demonstrated strong profitability driven by order volumes and technological advantages. Downstream sectors—including new energy, consumer electronics, and overseas infrastructure—exhibited robust absorption capacity, facilitating smooth price transmission. The industrial chain operated in an orderly manner from top to bottom, with high profitability boosting corporate willingness to maintain production and support price levels. Meanwhile, the gradual elimination of export tax rebates for aluminum products has compelled the industry to phase out low-end capacity and transition toward high-value-added products.

VII. Market Outlook

International aluminum prices are expected to remain strong, supported by low inventories, supply deficits, and geopolitical risks. Domestic prices for electrolytic aluminum and aluminum products will likely fluctuate within a high range, supported by both export and domestic demand; the operating price center is projected to be 23,500–25,500 RMB/ton, with strong support at the 23,000 RMB/ton level. The price spread between domestic and international markets is likely to persist, and aluminum product exports are expected to remain at high volumes.

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