Economic factors influencing aluminium production, demand and supply and consumption in 2025

The aluminium market is going through big changes, influenced by shifts in production, trade policies and demand patterns. Understanding these key factors will help businesses and other stakeholders prepare for what lies ahead.

AL Circle’s report “Global Aluminium Industry Outlook 2025” focuses on the data-driven analysis of production trends, market forecasts and growth projections for the aluminium industry.

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Let’s take a closer look at the main trends that will shape the demand for aluminium and supply in 2025.

1. Global Aluminium Production Trends

According to the International Aluminium Institute (IAI), global primary aluminium production rose from 69.04 million tonnes in 2022 to 70.7 million tonnes in 2023. AL Circle forecasts that production will surpass 72 million tonnes in 2024, demonstrating the sector's resilience amid global challenges.

For more in-depth analysis, pre-book this report.

These figures create a strong base for future growth and innovation in 2025 as the world economy continues to recover and industrial demand increases.

2. Aluminium Prices and Market Deficit

The relationship between production costs and market prices is becoming more apparent as the market faces potential deficits in the near future.

A return to a market deficit in 2025 is expected due to:

1. Slower production growth
2. Record-high alumina costs, driven by supply chain disruptions in Guinea, Australia and Jamaica
3. Robust demand from China

3. Supply Dynamics and Russian Output Cuts

Rusal, one of the biggest aluminium producers outside China, is cutting its production by 500,000 tonnes due to high alumina costs. The first phase will see a 250,000-tonne cut, reducing production by 6%.

This report provides more details on Russian aluminium exports.

4. Tightening Market Conditions

The global aluminium market is shifting from a surplus to a small deficit, leading to tighter conditions. This change is reshaping both regional and international strategies.

The global aluminium market is moving from a surplus to a small deficit in 2025, driven by:

1. Recovery in consumption, driven by lower interest rates
2. Limited production restarts

Regional dynamics, particularly in North America (USA & Canada), are critical to understanding these changes.

5. China’s Export Tax Rebate Changes

China’s changing trade policies show how internal priorities can have a global impact. These shifts may disrupt supply chains and affect global competition.

This change aims to boost domestic consumption and reduce reliance on exports. However, exporters now face higher costs, which could impact international supply chains and competitiveness.

6. Role of Renewable Energy in Aluminium Demand

China, which holds over 80% of global solar manufacturing capacity, is expected to lead renewable energy installations. This will account for nearly 60% of global additions between 2024 and 2030, according to the International Energy Agency.

As the world transitions to cleaner energy, aluminium will remain a key material, encouraging countries to diversify their raw material sources.

7. Impact of Trade Policies and Tariffs

Trade policies and tariffs are heavily shaping the aluminium market, especially in regions heavily reliant on imports.

A deeper analysis of regional trade policies highlights their impact on the industry.

8. Volatility in the Metal Market

The aluminium market is highly sensitive to global events and price fluctuations are a key concern for industry players.

Aluminium LME Price Trends (2024)

Note: The December average data has been updated as of 20 December 2024.

2025 Market Outlook

• A leading bank predicts that aluminium prices can average $2600 to $2650 per tonne in 2025.
• Price swings are linked to factors like geopolitical tensions and supply chain disruptions.

Conclusion

The aluminium market in 2025 is anticipated heading for some significant change, shaped by slower production growth, trade policies and increasing demand for renewable energy. While challenges like high alumina costs and geopolitical tensions remain, there are opportunities for growth in clean energy and global consumption recovery.

To succeed in this changing market, stakeholders must closely monitor production trends, trade policies and demand drivers. Pre-book the Global Aluminium Industry Outlook 2025 to stay ahead of the curve and leverage these insights for strategic planning.

AL Circle is an integrated virtual ecosystem bringing the entire global aluminium value chain under one roof through news, business, and event platforms. Being driven by the mission to be a one-stop information and knowledge provider in the aluminium industry, AL Circle publishes the latest news, interviews, blogs, event details and price updates daily.