More Stories

Informist, Tuesday, Jan. 20, 2026

 

MUMBAI – The recent surge in aluminium prices reflects a mix of supply constraints and policy developments. Aluminium prices on the London Metal Exchange are at multi-year highs above $2,900 per tonne, supported by production caps, environmental standards, and changes in China's trade position, according to Erwan Jacob, macro analyst, datastream and macroeconomics at LSEG.

 

Several factors are driving the upward trend in aluminium. "Chiefly, US-China trade talks have progressed, with the US announcing NVIDIA's most advanced chips will remain eligible for export to China. In addition, China is also set to suspend export controls on rare earth metals and end investigations into US chipmakers," Jacob said in a report.

 

Beyond tariff challenges, geopolitical dynamics are also shaping aluminium prices. A closer Russia-China relationship is visible through export and import of raw materials and commodities, including aluminium, Jacob said. China has raised its aluminium imports from Russia, almost doubling on year. At the same time, China's role in global aluminium markets is shifting. "Exports of semi-finished aluminium products have declined, while imports of primary aluminium has risen. These changes suggest a fundamental change in China's position within global aluminium markets – transforming from a net exporter to potentially a net importer," Jacob said.

 

Another key factor for the rally in aluminium is constrained supply, as China maintains a strict cap on aluminium production. The limit, set at 45 million tonnes of primary aluminium annually, was introduced to address overcapacity and environmental concerns, Jacob said. "China's environmental standards for aluminium production include a maximum energy consumption of 13,000 kWh per ton, stricter emissions controls, and a ban on new projects in heavily polluted regions. The aluminium industry is energy-intensive, with smelting operations traditionally relying on coal power" Jacob added.

 

Moreover, sustained growth in aluminium demand is also supporting prices. The International Aluminium Institute expects demand to rise 40% by 2030 due to electric vehicle production, renewable energy, and artificial intelligence-driven data centres.  End

 

US$1 = INR 90.97

 

Reported by Ashutosh Pati

Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.