Aluminum

1. The ceiling of domestic production capacity and the difficulty of resuming overseas production have formed long-term constraints: as the world's largest aluminum producer, China's electrolytic aluminum industry is subject to strict capacity control, and the space for new production capacity is limited, making it difficult to expand effective supply. At the same time, overseas markets such as Europe have been slow to resume production due to high electricity prices, and Southeast Asia's new production capacity has also fallen short of expectations. The restructuring of global trade flows has exacerbated regional shortages. ‌‌
2‌‌. The sudden force majeure event directly triggered the recent surge: In March 2026, Bahrain Aluminum (ALBA), an important global primary aluminum producer, announced that it had encountered force majeure and could not fulfill its supply contract normally. This sudden event led to a sudden tightening of global aluminum supply expectations, becoming the direct trigger for the daily surge of over 4% in London aluminum prices in early March, breaking through $3375/ton. ‌‌

1. New energy and emerging industries have become the core increment: the demand for traditional buildings and household appliances remains stable, while the rapid development of new energy vehicles, photovoltaics, energy storage, and AI computing infrastructure has completely changed the growth logic of aluminum demand. For example, the amount of aluminum used in new energy vehicles has significantly increased, and the demand for photovoltaic frames, energy storage boxes, and other components continues to grow. ‌‌
2‌‌. The trend of "replacing copper with aluminum" is deepening and expanding its application scenarios: In the fields of high conductivity and heat dissipation, aluminum is replacing copper on a large scale, especially in areas such as power grid upgrades and data center construction, which further releases the market demand for aluminum. Morgan Stanley predicts that China's aluminum demand will maintain year-on-year growth in 2026

1. Electricity and carbon costs push up the industry cost curve: Electrolytic aluminum belongs to a high energy consuming industry, and electricity costs account for more than 30% of the total cost. The global increase in electricity prices has directly raised production costs. At the same time, the implementation of the EU Carbon Border Adjustment Mechanism (CBAM) has put additional cost pressure on high emission production capacity, forcing the overall cost curve of the industry to shift upward. ‌‌
2‌‌. Macro funding is driving up prices: The expectation of the Federal Reserve cutting interest rates has increased, leading to a weakening of the US dollar and boosting commodity prices denominated in US dollars. At the same time, funds continue to flow into the non-ferrous metal sector, reactivating the financial properties of aluminum and resonating with fundamental factors, accelerating price breakthroughs.