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UK aluminium squeezed by weak production, soaring demand, and high energy costs – What's the way forward? What UK Budget indicates?

EDITED BY : 6MINS READ

The United Kingdom’s aluminium industry has two options ahead to survive - one is by remaining reliant on imported aluminium cast, rolled, extruded, or forged semi-fabricated products with little or no control over embedded carbon, and the other is by developing a domestic recycling-based supply chain aligned with circular economy principles and national net zero goals. Because over the years, almost all the UK’s primary aluminium smelters have shut their operations due to unbearable energy costs. The only remaining smelter is the one owned by Alvanche in Lochaber, capable of producing a small fraction (50,000 tonnes per year) of the UK’s growing aluminium need.

UK aluminium squeezed by weak production, soaring demand, and high energy costs

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UK aluminium demand vs production

According to 2024 analysis, aluminium consumption in the UK domestic market was about 296,000 tonnes, of which primary aluminium demand was 167,000 tonnes and secondary aluminium demand was 129,000 tonnes. The market value, which was at USD 2.03 billion in 2023, is poised to grow at a CAGR of 3.2 per cent to USD 2.65 billion by 2030. In contrast, aluminium production decreased from 320,000 tonnes in 2000 to 103,000 tonnes in 2024.

In the UK, domestic aluminium production tumbled but not the demand. As a result, the country turned to imports to fill the gap. In 2024, the United Kingdom imported 882,503 tonnes of aluminium, up by 4.38 per cent from 845,446 tonnes in 2023. In the first eight months of 2025, the country hauled 626,843 tonnes of aluminium versus 566,995 tonnes a year ago.

This rising strategic dependence is precisely why the UK Government added aluminium to its list of critical minerals in March 2025. Aluminium, thus, now sits alongside lithium, cobalt, and rare earths – which itself is a sign of its essential role in transportation, aerospace, defence, communications infrastructure, renewable energy systems, and electric vehicles. But political acknowledgement means little when the economics are stacked against domestic production.

Also read: One month to CBAM: what’s in, what’s out, who pays, and how the aluminium industry must prepare

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EDITED BY : 6MINS READ

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