China's 45 million tonne per year regulatory cap on primary aluminum production is becoming the defining constraint in the global aluminum market. With 2025 output at approximately 44 million tonnes — 97-98% of the cap — there is virtually no headroom for additional domestic supply growth in 2026.

The International Aluminium Institute reported global primary aluminum output of 73.78 million tonnes in 2025, with growth driven almost entirely by China. April 2026 production ran at approximately 5.92 million tonnes (197,400 t/day), slightly down year-on-year, reinforcing that global supply growth is modest just as demand accelerates.

Demand from EVs, solar installations, and grid infrastructure is the primary growth driver. Each EV uses approximately 250 kg of aluminum (30-40% more than an equivalent ICE vehicle), and global solar installations grew 40% year-on-year in 2025. Grid infrastructure investment, particularly in developing economies and for US transmission upgrades, is further boosting consumption.

The supply-demand math is clear: global aluminum output grows at 1-2% annually, constrained by China's cap, smelter curtailments in Europe (high energy costs), and long lead times for new smelter capacity. Demand from electrification, grid buildout, and data center construction is growing at 3-4% annually. The gap widens every year.

Wood Mackenzie has warned that the deficit could reach up to 4 million tonnes in 2026 under a severe disruption scenario involving Middle East conflict, supporting aluminum prices toward $3,500/t. Even under base case assumptions, the structural deficit is expected to persist through 2027-2028.

What this means for buyers

China's capacity cap is not a policy that will change quickly. Plan for structurally higher aluminum prices through 2028. Consider long-term supply agreements with Middle Eastern producers (who are adding capacity) as a diversification strategy. Monitor Chinese domestic demand — if it softens, China could become a net exporter of semi-fabricated products, potentially easing global tightness temporarily.