Aluminum price surge kicks off the year above $3,000 per ton

Aluminum Market Overview

The aluminum market opened the year with strong bullish momentum, supported by tightening supply conditions and declining exchange inventories across major trading venues.

On January 5, Comex aluminum prices reached $3,050.75 per metric ton, reflecting a daily increase of $48.50, or 1.6 percent. In parallel, the London Metal Exchange (LME) reported a three-month aluminum price of $3,015.50 per metric ton, confirming synchronized price strength across U.S. and European markets.

Market participants responded to persistent supply-side constraints, particularly production caps in China and structurally elevated energy costs in Europe, which continue to limit smelting output. ****

Market Data Table (Comex vs. LME)

Key Highlights

Supply Constraints

• China continues to enforce a nationwide cap on aluminum smelting capacity, limiting incremental primary supply.

• European aluminum producers face output restrictions due to persistently high electricity prices, impacting energy-intensive smelting operations.

Demand Trends

• Global construction activity remains resilient, sustaining baseline aluminum consumption.

• Renewable energy infrastructure projects, including solar and wind installations, are driving structural growth in aluminum demand.

• The recycled aluminum segment shows elevated volatility, reflecting tighter scrap availability and shifting melt schedules.

Inventory Changes

• LME warehouses recorded inflows of 23,500 metric tons in November 2025.

• More than 40,000 metric tons exited LME warehouses during the same period.

• Net inventories declined by over 16,500 metric tons month-on-month, reinforcing the bullish pricing environment.

SuperMetalPrice Commentary:

The current aluminum price surge is best understood as a manifestation of long-term structural imbalances rather than short-term speculative activity. China’s supply-side structural reform, implemented through strict smelting capacity caps, effectively removes the possibility of rapid production expansion, even during periods of strong pricing signals.

In Europe, the aluminum supply chain faces a different but equally persistent constraint. Energy-intensive smelting remains economically challenged under elevated power costs, particularly as decarbonization policies tighten emissions standards and reduce access to low-cost baseload electricity. These factors collectively limit primary aluminum output and increase regional reliance on imports and recycled material.

From a medium- to long-term perspective, the convergence of capacity discipline in China and structurally higher production costs in Europe suggests a constrained global supply curve. At the same time, aluminum demand linked to renewable energy systems, electric vehicles, and lightweight construction materials continues to expand. This asymmetry between supply rigidity and demand growth increases the probability of sustained price premiums, even amid broader commodity market volatility.

As recycling capacity expands and secondary aluminum plays a larger role in the supply mix, scrap availability and melt scheduling—such as those linked to major producers’ facilities—will become increasingly influential price drivers. In this environment, aluminum pricing is likely to remain elevated, with volatility driven more by physical market fundamentals than by macro-level sentiment shifts.