FX.co ★ Aluminum Holds Pullback

Aluminum futures are currently trading at $2,675 per tonne, maintaining their recent retreat after reaching a nine-month peak of $2,730 earlier this March. This development follows improved availability of raw materials. Notably, major alumina producers in Guinea, Australia, and China have augmented their production capabilities, recovering from a series of disruptions experienced last year. This increased capacity is driving alumina prices towards their lowest levels in a year and enhancing processing rates for smelters. Despite this, the supply of finished aluminum products is anticipated to decelerate. In 2024, China produced a record 44 million tonnes of aluminum. However, this output is expected to slow significantly this year as Beijing enforces a production cap of 45 million tonnes established in 2017 to manage supply surplus and adhere to carbon emission targets. Additionally, recent trade data reveals that China's aluminum exports have been restrained following the government's termination of tax rebates on international sales. This has led to rising prices on global benchmarks as local producers focus more on domestic sales.