Aluminium Prices Surge to $3,000/Tonne on China Output Cap, South32 Shutdown
Aluminum | 2026-01-02 10:29:58
One of the main drivers is China’s continued cap on aluminium smelting capacity.
By Paul Ploumis
SEATTLE (Scrap Monster): Aluminium prices have climbed to around $3,000 a tonne, hitting this level for the first time in more than three years, as supply concerns combine with expectations of steady long term demand, according to Bloomberg. The rally suggests the global aluminium market may be entering a tighter phase after years of relatively comfortable supply.
One of the main drivers is China’s continued cap on aluminium smelting capacity. As the world’s largest producer, China has set a ceiling of 45 million tonnes on annual output. With demand rising from construction, power, transport and electric vehicle sectors, the cap is expected to limit fresh supply and support prices.
Aluminium prices on the London Metal Exchange have risen for three consecutive sessions. On the Multi Commodity Exchange, January aluminium futures gained Rs 5.07, or 1.92 percent, to trade near Rs 297.20 per kg, with volumes of more than 1,200 lots.
Global supply worries have increased after South32 announced plans to place its Mozal aluminium smelter in Mozambique under care and maintenance by March 2026. Analysts expect the shutdown to further tighten supply and support aluminium prices over the medium term.
POLL
Which factor is most likely to support aluminium prices over the medium term?
Frequently Asked Questions
- What is the current aluminium price milestone?
Aluminium prices have reached around $3,000 per tonne, the highest level in over three years.
- What is driving the price increase?
Prices are supported by China’s smelting capacity cap, rising demand from construction, power, transport and EV sectors, and supply disruptions.
- What global supply event may impact aluminium prices further?
South32 plans to place its Mozal aluminium smelter in Mozambique under care and maintenance by March 2026.
