Edgardo Gelsomino has been a Subject Matter Expert in aluminium at Wood Mackenzie since 2010. Before joining Wood Mackenzie, Edgardo worked for an aluminium producer other leading London-based research and consulting firms. His work has spanned the entire aluminium value chain, including carbon products and power, delivering both research studies and consulting assignments. In an interview with AL Circle, he has shared his valuable opinion on future aluminium prices, supply chain in the near-term, impact of China’s 45-million-tonne cap on the global industry, and CBAM implications.
Read the interview below to get key insights into the near-term aluminium industry dynamics.
AL Circle: Aluminium prices touched USD2,900/t in early November 2025, and after a short-lived correction, they consolidated at around USD2,850-2,870/t range in December. Are prices at current levels sustainable?
Edgardo Gelsomino: It seems to me that the aluminium price has established a robust support at around USD2850/t, which is a significant breakout from the levels seen in previous months. There is also a moderate contango that suggests to me no critically tight points that could destabilise prices in the weeks ahead. On the contrary, I think it is very possible that we see prices braking through USD2900/t once again in the coming weeks, as markets remain sensitive to supply risks. In addition, LME investor positioning remains highly bullish.
AL Circle: The European Union is pushing to curb aluminium scrap exports while exempting scrap from its CBAM rules – effectively aiming to build a larger domestic scrap pool for secondary production. Do you think this is the right approach to build the low-carbon metal industry?
Edgardo Gelsomino: There is a global trend towards restricting scrap exports as countries start to realise its strategic value. In that sense, the EU is not alone, and in the current trade environment restricting exports sounds like a sensible approach. The second part of your question, about the exempting aluminium scrap from the EU CBAM rules is more complicated. Currently, CBAM targets primary aluminium and some downstream products, not waste or scrap. And that is controversial, because it can create a major loophole for carbon leakage. While it sounds reasonable to treat recycled material as low carbon intensity products, they are certainly not zero carbon. There is also the potential for scrap based fabricated products entering the EU market with misrepresented scrap content. The treatment of post-consumer and pre-consumer scrap should also be revisited. On this there is a strong consensus that they should be treated differently. To answer your question, I think curbing aluminium scrap exports goes in the right direction to creating a more levelled ground for domestic secondary aluminium producers to compete with imports. On the exclusion of scrap from the CBAM rules, without any consideration, I think it will create loopholes that will end up undermining the CBAM policy. I think the EU needs to design robust mechanisms where scrap is treated as a low carbon intensive product at the border, but also to make it very difficult to use scrap or scrap containing products as a vehicle to circumvent carbon costs.
AL Circle: The global race for aluminium scrap is being driven by soaring demand for low-carbon aluminium. What trajectory do you expect for low-carbon aluminium consumption in 2026 and beyond, and which industries are poised to lead this growth?
Edgardo Gelsomino: The global race for scrap is being driven by aluminium producers and semi fabricators increasing scrap feedstock. Originally to lower costs of production, and in recent years, for producers to improve their own low carbon credentials. There is also a case for consumers using scrap to reduce their carbon liability, if they operate in a market where emissions translate into higher operating costs. I still don’t see a soaring demand for low carbon aluminium. A good indication of this is the limited, and in many cases non-existent green premium. Producers have been trying for a long time to develop a price differentiation for low-carbon aluminium but those efforts have not yet paid off. Few consumers feel comfortable paying more for low-carbon aluminium, and volumes transacted with green premiums are still small. There is a regional preference as well. In Europe you may have more consumer driven demand, but in most other regions, that’s not the case. I am more concerned about supply. Scrap is hard to come-by and most large primary aluminium projects in the pipeline for the rest of this decade are going to be powered by coal-fired power plants. I am afraid aluminium supply in the coming years is not going to get greener.
AL Circle: How do you foresee the supply of primary aluminium across the globe in 2026, with China nearing 45-million-tonne cap, with 50% US tariffs in place, and the EU preparing for CBAM implementation?
Edgardo Gelsomino: As China approaches its self-imposed 45-million-tonne capacity cap, global primary aluminium supply dynamics change. The new areas of growth in the coming years are Indonesia, India, and possibly Vietnam. There are also a few other countries with Greenfield and Brownfield projects that show various levels of progress. There is also the policy driven restarts and Greenfield smelter projects in the USA. We will see Century Aluminum restart some of its idle capacity, but for the Greenfield projects, their future is less certain. The challenge for those is to convince investors that protective policies will be immune to future changes of administration.
As of China, the country may no longer be the engine of growth for aluminium supply, but is still by far the largest primary aluminium producer in the world. A focus to efficiency and the adoption of state-of-the-art technologies will set the bar high for the future smelter projects elsewhere.
Meanwhile, in the EU, the CBAM enters its definitive phase on January 1, 2026. With a gradual implementation and deferred payments, I don’t see any significant change in aluminium supply in Europe next year, apart from additional friction due to complex paperwork and associated costs.
In addition to new supply, there are clear supply risks next year, with the Mozal smelter in Mozambique being one of the most potentially impactful in terms of market reaction and price implications next year.
AL Circle: With energy crises intensifying across several regions and renewable power often being intermittent, how, according to you, aluminium smelters, which depend on 24/7 stable electricity, will remain viable? What does the future hold for smelter survival under these conditions?
Edgardo Gelsomino: The latest bout of aluminium projects in Southeast Asia and India prove that the model of building aluminium smelter capacity with dedicated coal power plants has not yet been abandoned. Elsewhere, the decarbonisation plans of aluminium producers remain in place. We see smelters’ power mix improving with the addition of complementary renewable power, PPA agreements and on the back of greener power grids. I see those two different ways of powering aluminium smelters continuing for a while. Longer term, fossil fuel power generation will need to address the problem of carbon emissions by abandoning fossil fuels, or by making carbon capture and storage economically viable. Any of these paths will require capital investment and will result on higher power costs to smelters.
