The price of aluminum rose in the closing trade of the week after several days of increased volatility amid risks to supplies from the Middle East, changes in Chinese exports and expectations of a possible easing of US tariffs on the Canadian metal.
On the London Metal Exchange on August 21, the price of aluminum rose by about 1.2% to $3,242 a tonne. Other market indicators during the day showed a level of around $3.23-3.25 thousand per ton.
Over the past month, the metal has gained about 1.8% in price, and compared to the level of a year ago, aluminum remains more expensive by almost 24%.
Despite the increase in recent trading, the price has retreated significantly from the high of early June. Then three-month aluminum on the LME rose to $3,787.5 a tonne, the highest level in about four years. By mid-August, the price dropped to approximately $3.27 thousand per ton.
The main reason for the June jump was supply disruptions from the Middle East amid the conflict with Iran. Before the situation worsened, the Gulf states provided about 10% of the world's primary aluminum production. Additional problems arose at enterprises dependent on gas supplies.
However, a significant part of the deficit was compensated by China. In the first half of the year, Chinese exports of aluminum alloys almost doubled to 238.5 thousand tons, and deliveries of semi-finished products increased by 18% to 3.2 million tons. At the same time, China's domestic demand remained relatively weak, while primary aluminum production was at a level close to historic highs.
Chinese enterprises are currently operating at the edge of Beijing's national production capacity limit of 45 million tons per year, which limits the possibility of further rapid expansion of production.
Trade negotiations between the US and Canada have become another factor for the market. According to Reuters, the two sides are close to a deal that could potentially reduce US tariffs on Canadian aluminum from 50% to 25%. Such a decision could make Canadian metal supplies to the U.S. more attractive again and reduce volumes going to Europe.
As a result, the aluminum market is caught between two opposing trends: the recovery and growth of Chinese supplies are restraining prices, while geopolitical risks, production restrictions and trade barriers keep them well above last year's levels.
Earlier, the Experts Club think tank published a short video on global aluminum production in 1970–2024. According to the center's analysis, in 2024 China produced about 43 million tons of primary aluminum, or about 60% of the world volume. It was followed by India — about 4.2 million tons, Russia — 3.8 million tons, Canada — 3.3 million tons, and the UAE — 2.7 million tons.
Watch a short video by Experts Club about global aluminum production - https://youtube.com/shorts/cVVIjdMZL-w?si=dAUR8Purot4TxLsm
