Executive Summary: The global aluminium sector is feeling the heat of a supply crisis, as major aluminium producers face policy curbs, geopolitical crises, sanctions and tariff hurdles, and environmental setbacks. The war in Iran has further inflated the crisis with shipping disruptions and attacks on oil and aluminium facilities in the West Asian region.

Top aluminium producers in 2025 (,000 tonnes)

Source: USGS

Global aluminium production in 2025 is estimated at 73.8 million Mt (International Aluminium Institute), with China accounting for 45 Mt. As we can see, all major primary producers are operating at almost 100 per cent capacity, leaving no room for a rise in production in 2026. Global secondary aluminium production in the year was about 42.4 Mt, resulting in a total metal supply of 116 million mt. On the other hand, rising aluminium consumption and shrinking capacity across Europe and the U.S. have created global supply uncertainties.

The great Asian supply crisis

Coming back to 2026, the year began with multiple events signalling a decline in global supply. China has almost exhausted its self-inflicted annual primary aluminium capacity cap of 45 million. Furthermore, with growing anti-dumping investigations across economies against Chinese imports and import tariff blockage, China’s position as a global aluminium supplier is slipping. On the other hand, Russia, one of the largest suppliers of aluminium to the US and Europe, remains out of the league due to the Western sanctions after the war with Ukraine. This was followed by South 32's announcement in March of the closure of the Mozal Aluminium smelter, which has a capacity of 580,000 tonnes per year.

Supply chain disruptions intensified following the outbreak of war with Iran, severely impacting primary aluminium operations and shipments to and from the Gulf. The closure of the Strait of Hormuz disrupted a region that accounts for around 20 per cent of ex-China aluminium production and 8–9 per cent of global supply. Further pressure came from announced production cuts at Qatalum and Alba due to gas shortages, compounding market instability. Reports of Iranian missile and drone attacks on EGA’s Al Taweelah smelter and Alba’s Bahrain operations have reinforced expectations that the global aluminium market will face a tight, structural deficit in 2026.

Exploring alternatives

Europe is reeling under policy hurdles, energy costs, and a strict carbon tax mechanism, which keeps the region out of the league in the supply scenario for primary aluminium.  The U.S., one of the largest aluminium markets, has begun efforts to secure its domestic aluminium supply chain amid import tariffs that have soured its trade relationship with its largest aluminium supplier, Canada. Although the country’s primary aluminium capacity has shrunk to its lowest level, it is expanding its secondary aluminium capacity, with a strategic focus on end-of-life aluminium scrap recovery.

This situation has strategically positioned other key Asian aluminium producers, such as India and Indonesia, at the forefront of the global supply chain. This paper provides a critical evaluation of emerging aluminium hubs across regions and how they are leveraging geographical, natural, and logistical advantages to attract large-scale investments to expand aluminium capacity and upgrade production technology.

Emerging aluminium hubs outside China

Odisha (India): The raw material hub

Odisha is at the forefront of the Indian aluminium supply chain with abundant raw materials (bauxite), port connectivity, and captive power options. Major investments are being directed towards expanding brownfield capacity and adding greenfield aluminium capacity in the state. Odisha has about 1.5 billion tonnes of metallurgical-grade bauxite reserves, making it the perfect hub for aluminium production.  The state accounts for about 54pc of India’s total aluminium smelting capacity, with 2.7 million tonnes (Mt) split among Vedanta, Nalco, and Hindalco. Odisha also houses two alumina refineries operated by Nalco and Vedanta, with a combined capacity of over 5Mt per year. With the brownfield expansion in place for Vedanta Nalco, alumina capacity in Odisha will be over 8Mt by 2030.

Odisha's aluminium capacity is poised for significant growth from its current level. Nalco aims to achieve an installed capacity of about 1 million mt by FY2030, adding 500kt. Additionally, Vedanta plans to develop a 6 MTPA alumina refinery and a 3 MTPA aluminium smelter in Rayagada district, with an investment of $ 11 billion. With these expansion plans in place, Odisha will produce over 6Mt of aluminium annually by 2030.

The state government is also developing the Angul Aluminium Park to encourage ancillary and downstream industries, providing a comprehensive ecosystem for value-added aluminium production.

Russia: The sanction mayhem

Russia produces 3.8 Mt of primary aluminium per year and accounts for 6.2 per cent of global primary aluminium output.  Rusal produces the entire output using hydropower, accounting for more than 90 per cent of its electricity generation. This makes Russian aluminium one of the greenest aluminium supplies globally. Rusal also produces Allow green aluminium, which has a carbon intensity of not more than 4 tonnes of CO2 equivalent per tonne of aluminium.

However, sanctions on Rusal aluminium, imposed by the US and UK in April 2024  over its invasion of Ukraine, kept it out of the western markets. Following that, the London Metal Exchange (LME) banned Russian metal produced on or after April 13, 2024. Since then, Russian aluminium has mostly been shipped to Asian countries, with the bulk going to China.

Quebec (Canada): The green aluminium advantage

Quebec is the largest aluminium producer in North America, with a total annual capacity of approximately 3.2 million tonnes of primary aluminium, supplying 90 per cent of Canadian aluminium. With an export value of $7.1 billion, this sector accounts for 10 per cent of the province's exports.

Its largest smelter, Alouette (40 per cent owned by Rio Tinto), can produce 634,000 tonnes per year. Other major facilities include the Bécancour smelter, co-owned by Alcoa and Rio Tinto (462,000 tonnes), and Rio Tinto's ongoing expansions in Alma and Saguenay, totalling about 360,000 mt per year. Quebec's aluminium output benefits from abundant renewable energy, making it one of the "greenest" aluminium productions in the world.

Rio Tinto’s other smelters, including Alma, Arvida-AP60, Grande-Baie, Laterrière, and PLS-Dubuc, account for the rest of the output. Rio Tinto’s Saguenay operations produce Renewal, the industry's first certified low-carbon aluminium, with a footprint of 4 tCO2/tAl or lower. Quebec houses the production centre for ELYSIS’s inert anode aluminium potline in Alma, Québec.

Quebec remains at the forefront of global green aluminium supply, as Russian aluminium remains restricted. The U.S. share of Quebec aluminium exports has continued to decline since the tariff was implemented, while Europe’s share rose to 18 per cent from 0.2 per cent, according to S&P Global Market Intelligence. U.S. aluminium imports from Canada declined significantly in 2025, dipping 26 per cent to 2.33Mt from 3.15Mt in 2024 (International Trade Administration).

UAE (Gulf): The strategic shift from oil to aluminium

Aluminium production in the six Gulf Cooperation Council (GCC) countries reached about 6.45 Mt in 2024, according to data from the Gulf Aluminium Council (GAC). UAE became the world’s fifth biggest aluminium producer, with an annual output of nearly 2.7 Mt coming from Emirates Global Aluminium (EGA). Nearly 60pc of the aluminium produced by the GCC smelters is exported to Japan, South Korea, and other countries. 

However, aluminium producers in the Gulf are not planning to expand capacity in 2025-26.  The aluminium smelters, including EGA, plan to concentrate on upgrading operational efficiency and technical capabilities to increase output. EGA is focusing on expansion through mergers and acquisitions and on raising its share of renewable energy (solar and nuclear) to capture the western market. EGA’s acquisition of US-based secondary alloy producer  Spectro Alloys has been one of the most strategic developments in this regard. EGA Spectro’s expansion adds 55,000 tonnes of secondary billet production capacity in the first phase, raising total production capacity to 165,000 tonnes per year.  Additionally, it is constructing a recycling plant in the UAE with a capacity of 170,000mt per year of secondary aluminium billets.

On the primary side, EGA plans to develop an aluminium smelter in Oklahoma, U.S. The plant is expected to have a capacity of 600,000 tonnes of primary aluminium per year, nearly doubling US aluminium production.  The smelter construction is expected to begin by the end of 2026, with the first hot metal by the end of 2030.

Indonesia: Ore export ban and smelting expansion

Indonesia is slowly ramping up its aluminium capacity to strengthen its position as a major player in the global supply chain. The country implemented a bauxite export ban starting in June 2023 to boost domestic smelting. Although Indonesia’s market share would remain small, the country is expected to ramp up production substantially from 0.7 Mt in 2025 to about 1.4 Mt by 2027. The plan will be supported by increased bauxite and alumina output of 16 Mt and 7.6 Mt by 2027. The ramp-up will raise Indonesia’s share of global primary production from 1.0 per cent in 2025 to 1.8 per cent by 2027.

Bahrain, Australia, and Norway continue to account for about 4.5Mt of primary aluminium output, with no major expansion plans on the cards. Norway produces around 1.3 Mt of primary aluminium annually, primarily through Norsk Hydro, and supplies mostly in the EU, with production relying heavily on renewable energy and low-carbon aluminium. Bahrain’s Alba, on the other hand, is upgrading its smelting technology and has launched a green aluminium brand, Eternal, using recycled aluminium and carbon offset. 

Kentucky (U.S.): Aluminium downstream hub

While the production base for primary aluminium has shifted to Asia, the U.S. has remained the aluminium consumption hub with rising demand from the transport and packaging sectors. Kentucky’s metals economy is one of the most robust in the nation—spanning aluminium, steel, copper, and advanced alloys. It drives $38B in annual economic activity, supports 96,000 jobs, and leads the nation in primary metals job growth.

Kentucky is already home to the U.S.'s existing primary aluminium capacity, which is housed in Century Aluminum’s Hawesville and Sebree facilities. Hawesville was idled in 2022 due to energy security concerns, but has been the focus of restart/retrofit discussions, whereas Sebree is operating at 220,000 mt capacity. Smelters can serve as a foundation for any regional primary cluster.  Century plans to build the first new U.S. primary aluminium smelter in 45 years in Kentucky. Upon completion, the smelter would double the current U.S. primary aluminium capacity. The U.S. DOE selected Century for negotiations on up to $500 million to design a low-emissions smelter demonstration in Kentucky. That makes Kentucky a focal point for rebuilding primary supply.

In the downstream space, Kentucky is home to Logan Aluminium, the largest can sheet mill in North America. It produces aluminium sheet for the beverage can and automotive markets, supplying over 45 per cent of the North American can market. It is a joint venture owned by Novelis and Tri-Arrows Aluminium. It is a fully integrated operation with recycling, casting, rolling, and finishing. The state has also drawn large-scale recycling investment, including Novelis’ Guthrie advanced recycling centre.  The centre, with an annual casting capacity of 240,000 tonnes of sheet ingot, will be a textbook example of Novelis' closed-loop recycling programs.

Looking at the end-use side, Kentucky has several major automotive Original Equipment Manufacturers (OEMs), including Toyota’s largest plant in Georgetown and General Motors and Ford. This makes the state a perfect hub for domestic supply chain resiliency and closed-loop recycling.

On the flip side, the major roadblock remains the absence of a deposit return scheme in Kentucky. The state has an aluminium can recycling rate of 15 per cent, one of the lowest in the country. The state needs quick policy support and consumer awareness on UBC recycling.

Other developments

As far as the aluminium downstream players are concerned, Novelis and Hydro remained at the forefront with rolling, extrusion, and recycling capacities. Meanwhile, players such as Hindalco, Kobelco, UACJ Corporation, and Sumitomo are churning out aluminium rolled products in Asia. These companies have been working to increase the share of secondary aluminium in their raw materials to manage costs and reduce carbon intensity.

Meanwhile, several aluminium majors have launched low-carbon aluminium brands to meet the changing demands of high-end consumers.

Bottom line

Primary smelting remains power-intensive; projects only pencil out with competitive, reliable, and preferably low-carbon electricity. Policy or utility arrangements that secure long-term competitive power are essential. Additionally, both primary and advanced recycling plants require large CAPEX and time, which remains a bottleneck in finding a short-term solution. Hence, primary capacity expansions are taking place in regions that have access to raw materials and cheaper power.

Supply remains tight globally, and benchmark prices and premiums are likely to remain high due to tariffs, taxes, and energy costs. Quebec has already shifted some of its aluminium exports to Europe, as US tariffs came into effect. Meanwhile, the European Union (EU) Carbon Border Adjustment Mechanism (CBAM) is expected to be in force in 2026. The tax applies to EU imports of aluminium and other metals with higher carbon footprints. With the CBAM in place, Canada’s low-carbon aluminium will be the preferred choice for European buyers.  The US, on the other hand, has been raising its secondary aluminium capabilities, but immediate actions are required to secure the metal supply chain.

Meanwhile, if we set aside the present geopolitical situation, Asian producers are at an edge to capture the market. They have recognised that their green credentials must be enhanced to appeal to export markets. Hence, investments are being directed towards renewable power procurement and expansions of recycled aluminium production. With Chinese growth capped, buyers, especially automakers, aerospace, and Western markets, subject to carbon/CBAM pressures, will pay premiums or prefer supply chains that can guarantee lower carbon intensity. Hence, global aluminium majors are re-evaluating their production strategies to capture the rising demand from the new energy economy for the metal of the future and to fill the supply gap caused by geopolitical events and policy directives.

The series opens with coverage of India, offering a closer, deeper look at its growing aluminium ambitions, underlying strengths, and the hurdles it must navigate.