Aluminium prices on the LME fell 6.3% over the past month to $2,180 per tonne as Chinese aluminium exports surged to record levels, flooding global markets with low-cost metal that is depressing prices for producers elsewhere. China's aluminium smelters, supported by cheap coal-fired electricity in Xinjiang province, have been operating at near-record capacity utilisation and exporting aggressively as domestic demand growth slows.
India's aluminium producers Hindalco and Nalco are facing margin pressure despite higher volumes, as realised prices have fallen faster than input costs. Hindalco has highlighted the need for the government to impose anti-dumping duties on Chinese aluminium imports to protect the domestic industry, a request that is under active consideration by the Ministry of Commerce. The industry argues that Chinese producers benefit from implicit energy subsidies that constitute an unfair competitive advantage.
The aluminium market's oversupply situation is expected to persist through 2026 given the structural overcapacity in China's smelting industry and the lack of coordinated production discipline among global producers. However, the long-term outlook remains positive driven by growing demand from the EV sector, packaging industry and construction applications. The energy transition is expected to create structurally higher aluminium demand for the next two decades.
