JPMorgan expects aluminium price may get close to USD 3,000 per tonne in early 2026, helped by stronger copper prices and a market that, for now, looks reasonably tight. But several analysts say the outlook becomes much less straightforward once Indonesia’s new supply starts landing, and that may happen faster than the market is prepared for.
For years, Indonesia has talked about becoming a major aluminium producer. What’s different now is that many of the long-promised projects are actually close to starting up. Smelters, refineries and upstream investments are advancing at the same time, creating a level of momentum that could reshape the regional market.
Two of the projects — backed by Bintan Alumina Indonesia and Borneo Alumina Indonesia — are pushing the country’s alumina output toward a possible 7 million tonnes a year. On the metal side, Indonesia’s primary aluminium production may almost double in 2026, rising from around 815,000 tonnes to about 1.6 million tonnes, with several China-supported potlines expected to switch on in the second half of the year. That timing is important: the extra tonnes arriving later in 2026 are likely to put a lid on the price rally many traders are eyeing for Q1. Some forecasts see the year ending closer to USD 2,650 per tonne, with an annual average near USD 2,800.
The state-owned mining group MIND ID is a central part of this shift. Its new smelter in Mempawah—roughly 600,000 tonnes per year—is one of the biggest industrial builds underway in West Kalimantan. When paired with INALUM’s existing operations, Indonesia aims to reach roughly 900,000 tonnes of state-linked smelting capacity by 2029.
Private developers are just as active. Adaro Minerals is constructing a renewable-powered smelter in the vast North Kalimantan Green Industrial Park. The first metal is targeted for late 2025, starting at about 500,000 tonnes and later ramping toward 1.5 million tonnes. Adaro’s aluminium arm, PT Alamtri Indo Aluminium, recently put in around USD 300 million to keep work moving.