Global supply disruptions caused by the Middle East war have pushed London Metal Exchange (LME) aluminum prices to their highest premium over the Shanghai Futures Exchange (SHFE) since March 2022. This international shortage is driving a surge in Chinese shipments.
In April, China’s aluminum exports grew by 15% year on year to 598,000 tons. An analyst expect monthly exports to exceed 68 million tons soon, fueled by strong overseas demand for power grid aluminum rods and automotive aluminum alloys. Factories in Henan are currently operating at full capacity to fulfill booming orders.
Simultaneously, Guinea’s upcoming June export controls on bauxite are tightening raw material supplies. Coupled with stricter safety checks at domestic mines in Shanxi, Chinese refiners face rising production costs. It is expected that these shrinking bauxite supplies will reduce output, tighten the alumina market, and trigger a price rebound.