The global aluminium industry is at a crucial turning point as the surge in demand driven by the clean energy transition meets the urgent need to decarbonise a sector known for its high energy consumption. From new smelter projects popping up in Asia to the shifting supply-demand balance in China, Europe and India, industry players are grappling with production challenges, changing regulations and market ups and downs. Key trends, like fluctuations in LME prices, spikes in bauxite trade and strategic moves towards sustainability are transforming the competitive landscape for producers, suppliers and investors alike.
Upstream Weekly by AL Circle Pvt Ltd
{alcircleadd}Inside Asian aluminium industry
Adaro Minerals made strides with its aluminium smelter project through its subsidiary, PT Kalimantan Aluminium Industry. They're gearing up to kick off operations in stages, aiming for a start before December 2025. The first phase is set to produce 500,000 tonnes of aluminium ingots each year, with plans to ramp up to 1.5 million tonnes annually in later phases. Construction is well underway, with potroom equipment, anode systems, jetty facilities and housing for workers all nearing completion. To grab more details on the project, read here.
The global aluminium industry is at a crucial turning point, trying to juggle the rising demand fueled by the clean energy shift while also tackling the need to decarbonise one of the most energy-hungry sectors out there. Europe has taken the lead in aluminium decarbonisation, but Asia is struggling to keep pace. A study from September 2025 by Eurasia Group and Alcoa reveals that aluminium consumption is expected to soar by 40 per cent by 2030 and a staggering 80 per cent by 2050 compared to 2020 levels, highlighting its vital role in building a sustainable future. Yet, the industry has only managed to cut emissions intensity by 2 per cent each year over the last decade, which is far behind the 4 per cent annual reduction required to hit net-zero goals. Uncover more here.
According to a report from the Global Trade Research Initiative (GTRI), India’s exports of steel and aluminum to the EU have taken a significant hit—dropping by 24.4 per cent in FY25, just before Europe’s Carbon Border Adjustment Mechanism (CBAM), which is set to take effect on January 1, 2026. The steel sector experienced the most dramatic decline, with Indian iron and steel exports plummeting by 35.1 per cent to around USD 3.05 billion, while aluminum exports decreased by 9.8 per cent. The report highlights that even though the CBAM duty hasn’t been implemented yet, the requirement for carbon emissions reporting, which started on October 1, 2023, has already deterred exports to Europe. Get details about the Indian aluminium and steel industry here.
Despite a slight uptick in aluminium production in China during August—up about 1.22 per cent compared to last year and 0.33 per cent from the previous month, prices continued to fall. Exports of unwrought aluminium and related products saw a significant rise, jumping to 542,000 tonnes in July from 489,000 in June, while imports also increased, with August figures reaching around 320,000 tonnes, marking a 12.9 per cent year-on-year growth. Unveil more on China's aluminium production, click here.
In the first half of 2025, China’s trade in unwrought aluminum has revealed a growing imbalance: imports surged to around 2.1 million tonnes, marking a 2.4 per cent increase compared to the previous year. This rise is largely driven by strong demand from the construction and transportation sectors, along with a notable 18.2 per cent boost in bauxite inflows. On the other hand, exports fell short, with only 272,900 tonnes making their way overseas during the same timeframe. This gap highlights several challenges, including shifting global demand, regulatory obstacles like India’s anti-dumping measures and the US tariffs and ongoing price fluctuations. Know the complete picture here.
Press Metal is set for steady earnings growth in the latter half of 2025, due to a more promising outlook for the aluminium market. HLIB Research points out that several factors will help boost margins: stronger aluminium prices, smarter hedging strategies and falling input costs, especially the drop in carbon anode prices, which have decreased by about 5 per cent from one quarter to the next. The company’s cost structure is looking healthier, with the alumina-to-aluminium cost ratio expected to stabilise around 13 to 14 per cent. Tap here for more details.
LME aluminium price movement
This past week, LME aluminium prices mostly took a hit, although there were some modest rebounds towards the end as supply sentiment fluctuated. At the start of the week, prices dipped, with cash bids dropping to USD 2,622.50 per tonne. Reports showed that opening stock increased by about 0.64 per cent, which added more downward pressure. As the week progressed, we saw declines of around USD 20 to 25 per tonne in other benchmarks, reflecting weak demand and a cautious market outlook. However, there was a bit of stabilisation later on, with prices creeping back up to USD 2,661 per tonne as stocks rose by approximately 0.23 per cent, hinting at a potential tightening in physical availability. Throughout all this, alumina prices stayed relatively steady, indicating that input-cost inflation was not a significant concern this week. To know more about LME aluminium prices, click here.
Primary aluminium supply crunch
The global aluminium industry is facing major change, moving from a long stretch of surplus to facing its toughest supply challenges in twenty years. In the past, ample inventories and China's vast production capabilities kept the market well-stocked. But now, China's aluminium output has hit its limit of 45 million tonnes per year and exports are on the decline, indicating a tightening supply. This shift has caused a steep drop in exchange stocks, with registered and off-warrant inventories on the LME falling from over 3 million tonnes four years ago to just around 700,000 tonnes today. As a result, aluminium prices are expected to soar past USD 3,000 per tonne, likely staying high to address shortages. Uncover more about the supply crunch here.
Innovation & investment in bauxite
Rio Tinto, teaming up with Founders Factory, has just rolled out an exciting lineup of six impactful startup investments designed to lessen the environmental impact of mining. These startups include: DNAir, which uses airborne environmental DNA sensors for tracking biodiversity and biosecurity; Foray, focused on cell-derived seed growth to scale up ecosystem restoration; FAST Metals, which specialises in low-energy, zero-waste extraction of critical metals and green iron from mine waste; Hades, offering super-deep drilling technology to tap into geothermal energy and essential minerals; Namu Robotics, providing autonomous systems for scalable and verifiable reforestation; and Spoor, which employs AI for biodiversity monitoring to ensure that renewables and mining can harmoniously coexist with nature. Get more details about the project here.
China's demand for seaborne bauxite in 2025 transformed the global dry bulk markets and increasingly impacted upstream supply chains. From January to August this year, China's port discharges of bauxite reached around 145.2 million tonnes, a remarkable 26 per cent increase compared to last year, which translates to about 30 million tonnes more than the same timeframe in 2024. Guinea continues to be China's primary supplier, making up roughly 77 per cent of the imports (137.5 million tonnes), while Australia contributes about 17 per cent, with smaller amounts coming from Guyana, Turkey and Sierra Leone. Uncover more here.
India’s Ashapura Minechem has signed a long-term MoU with China Railway to collaboratively develop its Fako bauxite deposit located in the Kindia region of Guinea. According to the agreement, China Railway will handle the bauxite production and manage the logistics, while Ashapura will oversee sales, marketing and provide technical support, including quality assurance. This project is anticipated to not only enhance Ashapura’s production capacity but also create jobs and stimulate economic growth in one of Guinea’s less developed areas. Find more details about the project here.
Bauxite’s global performance H1 2025
In the first half of 2025, the global bauxite trade showed some striking differences, with Guinea leading. Guinea exported around 99.8 million tonnes, an increase of about 36 per cent compared to the previous year—valuing approximately USD 8.9 billion in export earnings, largely fueled by demand from China. Australia also saw some positive movement, with its export volume climbing to about 19.4 million tonnes, up from 17.6 million and revenues surged due to rising prices. On the other hand, Brazil and Turkey struggled logistical, regulatory and market hurdles that held back their export performance. Meanwhile, smaller players like Malaysia and Guyana capitalised on the situation, stepping in to fill the gaps left by these struggling exporters and boosting their share of the global market. Read in depth here.
Alumina: price, fuel consumption, export & regulatory demand
During the week of September 12 to 18, 2025, the spot prices for alumina in China, with a purity level above 98.6 per cent, saw a slight dip of 1.5 per cent compared to the previous week, settling at RMB 3,065 per tonne (USD 431). This decline was more gradual than the 2.4 per cent drop observed the week before. On the supply side, domestic alumina production continued to climb, with 44 producers collectively churning out 1.86 million tonnes, marking a 1.2 per cent increase from the week prior. This uptick in supply has led to a more cautious atmosphere in the market, as many primary aluminium smelters chose to hold off on buying spot goods, preferring instead to replenish their inventories through tenders at relatively stable prices. Learn more.
In 2024, the global consumption of fuel for alumina refining hit 1,188,250 Terajoules (TJ), which is a slight increase of 0.4 per cent compared to the previous year. This rise came hand in hand with a 3.8 percent boost in alumina production, climbing from 133.54 million tonnes in 2023 to 138.59 million tonnes in 2024. Interestingly, the amount of unreported alumina production dropped from 11.02 million tonnes to 6.35 million tonnes, showing that there's been a positive shift towards better transparency in energy usage reporting. Even with the uptick in production, coal continued to play a major role in the energy landscape, providing around 43 to 44 per cent of the total energy needs, with its consumption edging up from 512,679 TJ to 514,954 TJ. Dive deeper into the details here.
China's alumina exports saw a remarkable jump of 59.3 per cent year-on-year, reaching 1.75 million tonnes in the first eight months of 2025, as reported by the General Administration of Customs (GACC). In August alone, exports hit 180,507 tonnes, which is a 26 per cent increase compared to August 2024, although it represents a 21.3 per cent drop from July 2025. Russia continued to be China's top export destination, taking in 153,021 tonnes, or 84.8 per cent of the total, even with a 24.5 per cent decrease from the previous month. Find more details here.
Atlantic Alumina, the only bauxite refinery in the US, is under the microscope as Louisiana officials have flagged several containment issues at its red mud disposal site. Between late 2024 and mid-2025, inspectors found serious erosion in the levees, which led to caustic, orange-tinted runoff making its way into Blind River Swamp. The Louisiana Department of Environmental Quality (DEQ) has issued a compliance order that lists over 70 violations, mainly related to water quality and the structural soundness of the containment system. Although Atlantic Alumina claims that they've taken steps to stop the seepage, the DEQ is insisting on additional measures to tackle the environmental problems. Read more.
Recent investment in alumina project
Impact Minerals Limited has successfully raised AUD 4 million or USD 2.56 million through a highly oversubscribed strategic placement, issuing 615 million fully paid ordinary shares at AUD 0.0065 each. Pending shareholder approval, each share will come with a complimentary IPTOC Quoted Option, which has an exercise price of USD 0.015 and will expire on 28 September 2027. This funding will bolster the company's High Purity Alumina (HPA) production and research efforts, showcasing robust backing from major shareholders and highlighting their confidence in Impact Minerals' strategic path forward. Dig deeper.
As the aluminium value chain struggles with tighter supply, increasing regulatory demands and the shift towards cleaner production, industry leaders are focusing on strategic investments, boosting operational efficiency and fostering innovation. With the bauxite and alumina trade on the rise, ongoing decarbonisation initiatives and specific funding aimed at high-purity alumina production, companies that can foresee market changes and adopt sustainable practices are well-positioned to gain growth opportunities in the evolving global aluminium landscape.
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