Aluminium prices held steady this week, even as demand from clean energy projects and electric vehicles pushed higher. Normally, stronger demand and technological advances would draw out more supply but this time, the opposite is happening.
China, which accounts for more than half of world output, is still holding its annual cap near 45 million tonnes to meet climate goals. In the first half of 2025, production came in at 21.8 million tonnes, close to that ceiling. High power costs and tougher regulations abroad have also slowed smelting expansion.
Raw materials are adding to the squeeze. Alumina prices have hit record highs this year, doubling the cost of production. Russia’s Rusal has already trimmed as much as 500,000 tonnes in response.
Also read: Global Aluminium Industry Outlook 2025
On the London Metal Exchange, aluminium barely moved between USD 2,605 and 2,610 per tonne in the week of August 25–29. Traders called the calm “controlled tightness” — demand is there, but supply is being rationed.
Stocks are running low and LME inventories are at 15-year lows, leaving the market open to sharp swings if consumption rises.
In Longer term, the role of aluminium in the energy transition is showing an upward growth. Analysts estimate the average EV will need 250 kg of aluminium by 2025 and by 2030, demand could reach 10 million tonnes, with 2 million tonnes just for extrusions.
Copper: prices swing as green transition drives demand
Copper prices were more volatile. The metal opened the week at USD 9,816 per tonne, slipped to USD 9,703 on August 28, then climbed to USD 9,849 a day later.
China was again the driver. Its new energy vehicles used 461,600 tonnes of copper in the first half, up 36 per cent from a year earlier. Battery EVs took 322,800 tonnes, plug-in hybrids 138,800 tonnes. Globally, EV-related copper demand is forecast at 2.5 million tonnes in 2025.
Sales are surging too: China sold 6.9 million EVs in the first half, while worldwide sales are expected to pass 16 million this year.
Also, South Africa’s Harmony Gold, best known as a gold miner, is pushing into copper. It is working on a deal to buy Australia’s Mac Copper, adding to its 2024 purchase of Eva Copper.
Limited supply pushes prices higher
Both metals continue to face supply pressure. For copper, almost 40 per cent of producers are operating below break-even price at about USD 8,900 per tonne, which limits new investment. Mines take years to bring online and costs are rising.
Also read: From Asia to Africa: are new refining hubs redrawing the alumina map?
Analysts say the paradox of strong demand and high prices comes down to supply that cannot keep up. Aluminium output in China is stuck near its cap, alumina prices have doubled, and Rusal has pulled back. Copper producers face high costs, with nearly half running below break-even.
Also, LME copper stocks have dropped from 190,000 tonnes in May to 158,000 tonnes in late August, the lowest in years. Aluminium reserves are also close to a 15-year low.
Broader forces are adding fuel. The easing of US–China trade tensions, including a 90-day tariff pause earlier this year, lifted Chinese buying. Copper imports are expected to rise 18 per cent year-on-year in Q3 2025. At the same time, stimulus spending and currency swings are supporting demand and keeping volatility high.
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