As China edges closer to its self-imposed primary aluminium production cap of 45 million tonnes, a set billion-dollar questions is reverberating in air – is the global market counting days for supply deficit? Will anybody step in to bridge the gap? If yes, then who can do so at scale? While these questions seem obvious, answers may appear to be far less aligned with prevailing assumptions. However, before exploring the possibilties, let us check how the market is already reacting to the early signals of supply deficit amid steady demand growth.
How is primary aluminium responding to today’s market condition?
Already the rising demand and supply deficit is making its presence felt in prices. Primary aluminium on the London Metal Exchange has climbed to USD 2,932 per tonne (as of December 24), up 15.4 per cent over the year from USD 2,541 per tonne. On the supply side, China’s primary aluminium production has reached 40.44 million tonnes by November 2025, maintaining its monthly output between 3.65 and 3.75 million tonnes. If December output follows the same trajectory, annual production will stand at roughly 44.2 million tonnes - placing the country just a short step away from its long-standing ceiling.
Alternatives like the US, Europe, and Australia give very less assurance at this moment to take care of the primary aluminium supply gap because of the operational challenges they face due to electricity constraints and high energy costs. Then remains the Asian countries where new primary aluminium projects are gathering momentum, backed by capital investments and improved infrastructure.
Responses
