Aluminum prices have shown sustained strength since the beginning of this year. Fundamentally, the supply side continues to underpin aluminum prices. From a capital and sentiment perspective, the persistent rise in copper prices has boosted aluminum prices. Currently, positive factors continue to ferment, and aluminum prices are expected to rise amid volatility.
Capacity Ceiling Confirmed, Low Ingot Proportion
By December 2025, China's operational electrolytic aluminum capacity reached 44.594 million tons, approaching the capacity ceiling. This indicates extremely limited capacity expansion potential, with the supply side providing robust support for aluminum prices.
Structurally, aluminum ingots currently account for a small proportion. Data indicates that in December 2025, China's primary aluminum output reached 3.781 million tons, a year-on-year increase of 1.9%. Within this, molten aluminum accounted for 76.49% while aluminum ingots comprised 22.51%. Since aluminum ingots serve as the delivery commodity for China's aluminum futures contracts, the low ingot proportion implies limited delivery inventory, creating conditions for low stockpiles.
On the supply side, China's policies have capped electrolytic aluminum capacity, limiting significant supply expansion. With molten aluminum currently dominating supply, the low proportion of deliverable aluminum ingots further supports aluminum prices from the supply perspective.
Real Estate Performance Remains Modest, New Energy Sector Compensates
Demand for primary aluminum is concentrated in three sectors: construction (30%), transportation (20%), and power generation (16%). Within the construction sector, the real estate market still requires time to recover. Data indicates that from January to November 2025, China's commercial housing sales area reached 787.0174 million square meters, down 8.61% year-on-year, while completed housing area stood at 394.5393 million square meters, a 18% year-on-year decline.
In the transportation sector, China's automobile production and sales reached 3.532 million units and 3.429 million units respectively in November 2025, marking year-on-year increases of 2.8% and 3.4%. From January to November 2025, automobile production and sales totaled 31.231 million units and 31.127 million units respectively, reflecting year-on-year growth of 11.9% and 11.4%.
In November 2025, China exported 728,000 complete vehicles, a year-on-year increase of 48.5%. From January to November 2025, China exported 6.343 million complete vehicles, a year-on-year increase of 18.7%.
Due to the pursuit of lightweight design in new energy vehicles, aluminum alloy is widely used in the production of components. A single new energy vehicle consumes 220–300 kilograms of aluminum, significantly higher than the 150–200 kilograms used in a conventional fuel vehicle. Data shows that in November 2025, China's new energy vehicle production and sales reached 1.88 million and 1.823 million units respectively, representing year-on-year increases of 20.0% and 20.6%. From January to November 2025, China's new energy vehicle production and sales reached 14.907 million and 14.780 million units respectively, representing year-on-year growth of 31.4% and 31.2%.
Additionally, aluminum alloys are required for manufacturing photovoltaic cell frames and mounting brackets. From January to November 2025, China's new photovoltaic installations totaled 274.89 GW, a 33% increase year-on-year.
In terms of demand, the vigorous development of the new energy vehicle and photovoltaic industries has effectively offset the negative impact of the sluggish real estate market on primary aluminum consumption. Moreover, the application scenarios for primary aluminum continue to expand, with industries such as energy storage, robotics, low-altitude economy, smartphones, and winter sports equipment all utilizing aluminum as a raw material in production. Therefore, from a medium-to-long-term perspective, the primary aluminum market is expected to maintain stable supply while experiencing sustained growth in demand.
Electrolytic Aluminum Inventories Accumulate, but Bearish Impact Remains Limited
Regarding social inventories of electrolytic aluminum, as of January 12, SMM statistics showed inventories across five regions totaled 730,000 metric tons, an increase of 16,000 metric tons from the previous week. Inventories during the same period last year stood at 440,000 metric tons.
Current inventories stand at their highest level for this time of year in the past five years. However, since 2024, the accumulation of social aluminum inventories has not been significant, largely due to the low proportion of aluminum ingots. Moreover, the first quarter of each year is typically a period of active inventory buildup for aluminum. Therefore, the current inventory changes exert limited downward pressure on aluminum prices.
Stronger Copper Prices Benefit Aluminum
On December 29, 2025, copper prices first breached the RMB 100,000/ton threshold. Entering 2026, the main copper futures contract on the Shanghai Futures Exchange reached a record high of RMB 105,500/ton. The strengthening copper prices will also drive aluminum prices upward.
Positive Factors Continue to Ferment; Aluminum Prices Expected to Rise Amid Volatility
Aluminum prices have shown sustained strength since the beginning of this year. Fundamentally, the supply side continues to underpin aluminum prices. From a capital and sentiment perspective, the persistent rise in copper prices has boosted aluminum prices. Currently, positive factors continue to ferment, and aluminum prices are expected to rise amid volatility.
Capacity Ceiling Confirmed, Low Ingot Proportion
By December 2025, China's operational electrolytic aluminum capacity reached 44.594 million tons, approaching the capacity ceiling. This indicates extremely limited capacity expansion potential, with the supply side providing robust support for aluminum prices.
Structurally, aluminum ingots currently account for a small proportion. Data indicates that in December 2025, China's primary aluminum output reached 3.781 million tons, a year-on-year increase of 1.9%. Within this, molten aluminum accounted for 76.49% while aluminum ingots comprised 22.51%. Since aluminum ingots serve as the delivery commodity for China's aluminum futures contracts, the low ingot proportion implies limited delivery inventory, creating conditions for low stockpiles.
On the supply side, China's policies have capped electrolytic aluminum capacity, limiting significant supply expansion. With molten aluminum currently dominating supply, the low proportion of deliverable aluminum ingots further supports aluminum prices from the supply perspective.
Real Estate Performance Remains Modest, New Energy Sector Compensates
Demand for primary aluminum is concentrated in three sectors: construction (30%), transportation (20%), and power generation (16%). Within the construction sector, the real estate market still requires time to recover. Data indicates that from January to November 2025, China's commercial housing sales area reached 787.0174 million square meters, down 8.61% year-on-year, while completed housing area stood at 394.5393 million square meters, a 18% year-on-year decline.
In the transportation sector, China's automobile production and sales reached 3.532 million units and 3.429 million units respectively in November 2025, marking year-on-year increases of 2.8% and 3.4%. From January to November 2025, automobile production and sales totaled 31.231 million units and 31.127 million units respectively, reflecting year-on-year growth of 11.9% and 11.4%.
In November 2025, China exported 728,000 complete vehicles, a year-on-year increase of 48.5%. From January to November 2025, China exported 6.343 million complete vehicles, a year-on-year increase of 18.7%.
Due to the pursuit of lightweight design in new energy vehicles, aluminum alloy is widely used in the production of components. A single new energy vehicle consumes 220–300 kilograms of aluminum, significantly higher than the 150–200 kilograms used in a conventional fuel vehicle. Data shows that in November 2025, China's new energy vehicle production and sales reached 1.88 million and 1.823 million units respectively, representing year-on-year increases of 20.0% and 20.6%. From January to November 2025, China's new energy vehicle production and sales reached 14.907 million and 14.780 million units respectively, representing year-on-year growth of 31.4% and 31.2%.
Additionally, aluminum alloys are required for manufacturing photovoltaic cell frames and mounting brackets. From January to November 2025, China's new photovoltaic installations totaled 274.89 GW, a 33% increase year-on-year.
In terms of demand, the vigorous development of the new energy vehicle and photovoltaic industries has effectively offset the negative impact of the sluggish real estate market on primary aluminum consumption. Moreover, the application scenarios for primary aluminum continue to expand, with industries such as energy storage, robotics, low-altitude economy, smartphones, and winter sports equipment all utilizing aluminum as a raw material in production. Therefore, from a medium-to-long-term perspective, the primary aluminum market is expected to maintain stable supply while experiencing sustained growth in demand.
Electrolytic Aluminum Inventories Accumulate, but Bearish Impact Remains Limited
Regarding social inventories of electrolytic aluminum, as of January 12, SMM statistics showed inventories across five regions totaled 730,000 metric tons, an increase of 16,000 metric tons from the previous week. Inventories during the same period last year stood at 440,000 metric tons.
Current inventories stand at their highest level for this time of year in the past five years. However, since 2024, the accumulation of social aluminum inventories has not been significant, largely due to the low proportion of aluminum ingots. Moreover, the first quarter of each year is typically a period of active inventory buildup for aluminum. Therefore, the current inventory changes exert limited downward pressure on aluminum prices.
Stronger Copper Prices Benefit Aluminum
On December 29, 2025, copper prices first breached the RMB 100,000/ton threshold. Entering 2026, the main copper futures contract on the Shanghai Futures Exchange reached a record high of RMB 105,500/ton. The strengthening copper prices will also drive aluminum prices upward
As an integrated internet platform providing benchmark prices, on January 23, the benchmark price of aluminum according to SunSirs was 23753.33 RMB/ton, an increase of 5.70% compared to the beginning of the month (22473.33 RMB/ton).
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