Market Commentary: China is transitioning from 2024 to 2025 with bold trade strides as global geopolitics weigh in

Aluminium prices edged up by 0.08 per cent to close at INR 252.75 (USD 2.92) amid renewed investor optimism over China following comments from former US President Donald Trump hinting at a potential trade deal with the world's largest consumer of metals, as reported by investing.com. Market sentiment was further buoyed by developments within the European Union, which is preparing to impose sanctions on imports of primary aluminium from Russia. This anticipated move, the EU's geopolitical move of continual phasing-out of Russian aluminium, is a trend that has accelerated since European manufacturers began distancing themselves from Russian goods following the 2022 invasion of Ukraine.

Overview of China's aluminium trade front

China's aluminium export trade exhibited significant growth between 2020 and 2024, both in volume and value. Export volumes increased from approximately 4.85 million tonnes in 2020 to 6.65 million tonnes in 2024, representing a cumulative growth of around 37 per cent. In terms of value, exports rose from USD 13.13 billion in 2020 to a peak of USD 25.97 billion in 2022 before stabilising at USD 22.03 billion in 2024. This substantial increase in export value during 2022 likely reflects favourable global aluminium prices and heightened international demand amid supply chain disruptions. Despite subsequent price corrections, China's export strategy has remained robust, driven by its advanced production capacity and global trade partnerships.