Aluminum futures in the UK traded near $3,100 per tonne in February, hovering close to the three-year high of $3,270 reached on January 28, amid expectations of solid demand and limited supply growth. Output in China is projected to stall this year after the country, the world’s largest producer, reached its production cap of 45 million tons in 2025, while the government’s campaign against expanding manufacturing capacity has dampened hopes of any meaningful increase in that cap.
At the same time, efforts by Chinese smelters to develop alternative capacity in Indonesia have continued to run into difficulties, including higher energy costs and heightened regulatory risks. Elsewhere, elevated energy prices, equipment failures, and challenges in securing bauxite supplies have forced key smelters in countries such as Iceland, Mozambique, and Australia to suspend operations.
Against this backdrop, the Trump administration in the United States pushed back against reports that aluminum tariffs might be cut from their current level of 50%. These tariffs have driven the premium on US aluminum over UK benchmark prices to a record high.
