Aluminium prices dipped by 0.79 per cent, settling at 257.2, as the market continued to grapple with volatility stemming from inconsistent supply and demand. In August 2025, China's domestic aluminium production saw a year-on-year increase of 1.22 per cent and a month-on-month rise of 0.33 per cent.
On the trade side, exports of unwrought aluminium and related products surged to 542,000 tonnes in July, up from 489,000 tonnes in June. Imports also showed robust growth, climbing 12.9 per cent year-on-year in August to reach 320,000 tonnes. Cumulatively, imports for the first eight months of 2025 hit 2.65 million tonnes, reflecting a 2.7 per cent increase compared to the same timeframe last year
On the supply side, Guinea Alumina has lost all its mining licenses, affecting the ore supply for Emirates Global Aluminium (EGA), one of the top players in the industry. At the same time, LME aluminium inventories took a significant hit, dropping nearly 100,000 tonnes in the first part of September, leaving stocks at 375,000 tonnes and showing just how tight availability is becoming.
To know more about the global primary aluminium industry 2025 outlook, read “Global Aluminium Industry Outlook 2025”
On the other hand, Japan saw a 6.3 per cent month-on-month increase in aluminium stocks for August, even though the Q4 premiums offered to Japanese buyers have softened to between USD 98 and USD 103 per tonne, indicating a dip in regional demand. According to WBMS, the global aluminium market faced a deficit of 119,900 tonnes in July, pushing the total shortfall for January to July 2025 to 985,300 tonnes.
As reported by Reuters, in August, the daily aluminium production averaged 120,322 tonnes, which is a bit lower than June's average of 122,333 tonnes.
In August, China saw a 4 per cent year-on-year increase in its output of 10 nonferrous metals, which include copper, aluminium, lead, zinc and nickel, totalling 6.62 million tonnes. Over the first eight months of 2025, the overall production hit 52.05 million tonnes, reflecting a 5.4 per cent rise compared to the previous year, including tin, antimony, mercury, magnesium and titanium.
Also read: Overview of China's aluminium production in June 2025 and forecast for July
However, the increase in production happened even as aluminium prices slowly dropped, influenced by weaker demand in both local and global markets. A slowdown in manufacturing activity in China and the US, combined with a rise in domestic supply, put pressure on prices. By August, the average price had decreased to RMB 2,121 (USD 299.03) per tonne, a figure that still supports profitable production, particularly in areas that enjoy low-cost energy.
In the meantime, aluminium producers in the southwestern part of Yunnan province have been keeping their output strong, due to plentiful hydropower resources available in the area.
Technically, the market is currently seeing some long liquidation, with open interest dropping by 7.19 per cent to 3,109 and prices easing down by 2.05 rupees. Support is witnessed at 256 and below it may see a test of 254.7. On the flip side, resistance is at 259.1 and if prices can push past that, they could be aiming for 260.9.
Also read: China's aluminium imports surge in July'25
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