In September, aluminum prices initially strengthened but later weakened. According to the Business Society Commodity Market Analysis System, as of September 29, 2025, the average price of aluminum ingots in the East China market was 20,700 yuan per ton, up 0.31% from the market average of 20,636.67 yuan per ton on September 1.
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Aluminum prices have broken through the 20,000 mark, reaching a relatively high level over the past 1-2 years. The price of raw material alumina has declined from its peak, and the current profit margin per ton of aluminum is at a relatively favorable position.
Recent Fundamental Overview
At the current stage, the aluminum electrolysis market exhibits three key characteristics: “weakening cost support, slight inventory accumulation, and limited pre-holiday demand recovery.” The interplay among cost, supply, demand, and inventory factors collectively drives short-term market trends, as detailed below:
1. Cost Side: Overall Slackness Drags on Aluminum Prices, with Minor Upside for Select Varieties
Alumina: Supply Surplus Dominates Price Decline. The core logic behind the weakening spot price of alumina lies in market oversupply. Spot transaction prices in Shanxi and Henan regions have already dropped below the full cost line, intensifying profit pressure on enterprises. Although seven alumina plants in Guangxi maintain normal production, typhoon weather has disrupted port shipments, causing minor short-term disruptions to localized supply but failing to alter the overall oversupply trend.
Bauxite: Increased Imports Alleviate Raw Material Pressure
Upstream raw material support has improved, with domestic bauxite imports reaching 18.2898 million tons in August, a year-on-year increase of 17.65%. The significant rise in imports effectively eased the domestic raw material supply shortage. On the international market, the FOB price of bauxite from Guinea dropped to $74 per dry ton, further reducing import costs and providing some relief to the raw material costs for downstream alumina enterprises.
Prebaked anodes and thermal coal: Local gains struggle to offset overall cost easing. Despite rising prices for both prebaked anodes and thermal coal, the upward momentum remains limited. Recently, thermal coal prices have shown weak gains and failed to counteract the downward trend in key raw materials such as alumina and bauxite. Consequently, the overall production costs of electrolytic aluminum have exhibited a loosening trend, further weakening the supportive effect on aluminum prices.
II. Supply Side: High and Stable Capacity with Continuous Release of Incremental Pressure
Currently, domestic aluminum electrolysis supply remains at a high level, with new projects being implemented in an orderly manner. For example, the 490,000-ton capacity of Qinghai Zhonglv has been completed and put into operation, while there are still 1.06 million tons of capacity reserves awaiting commencement. Future supply growth is expected to be clear-cut.
In terms of production cuts, the short-term reduction scale is limited, with only 400,000 tons of capacity from Qinghai Zhonglv and 25,000 tons from Henan Yuguang being cut. In Yunnan, aluminum electrolysis companies have officially raised electricity prices by 0.12 yuan per kilowatt-hour, resulting in a weekly production cut of 80,000 tons. The resumption process has largely been completed, with 545,000 tons of the originally planned 565,000-ton capacity having resumed production. Overall, supply-side pressure persists.
3. Demand Side: Pre-holiday stockpiling drives localized recovery, but overall performance still falls short of expectations
As the holiday approaches, there is a slight release in downstream market stocking demand, driving demand to recover in some areas: the processing fee for aluminum bars in Guangdong remains stable at 300 yuan/ton, and prices remain firm; The average price of aluminum rods nationwide remains at 275 yuan/ton, and the market transaction pace has accelerated; The procurement enthusiasm in the field of casting aluminum alloys has increased, and the order volume has slightly increased. However, from the perspective of overall demand, the performance has not yet met expectations, especially in the export sector where the drag is significant. In August, the export volume of aluminum plates and strips decreased by 10.49% year-on-year, and the export volume of aluminum foil decreased by 24.33% year-on-year. The weak overseas demand has significantly constrained domestic electrolytic aluminum consumption.
Future forecast
Overall, the current electrolytic aluminum market is dominated by “weakened cost support” and “increased supply release”. Although pre holiday stocking provides temporary support for the demand side, the overall strength is limited. It is expected that aluminum prices will run weakly in the short term, with limited upward potential.
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