Aluminum futures in the UK fell below $3,100 per tonne from a three-year high of $3,270 reached on January 28th, following a sharp pullback across base metals as traders reassessed their speculative positions. The broader metals complex has retreated from its early-year peaks amid fading concerns over US dollar debasement and a moderation in speculative demand tied to the boom in global datacenter investment.
Even so, aluminum prices remain higher on the year, supported by expectations of tighter supply from major producers. In China, primary aluminum output is projected to stagnate after the country reached its 45 million ton capacity cap last year. Efforts by Chinese smelters to expand production through alternative facilities in Indonesia continue to encounter setbacks due to elevated energy costs and heightened regulatory risks.
At the same time, high energy prices, equipment failures, bauxite sourcing challenges, and geopolitical tensions have disrupted key smelting operations in other producer nations, including Iceland, Mozambique, and Australia, further reinforcing concerns over global supply.
