China's primary aluminum capacity ceiling of approximately 45 million tonnes per year continues to anchor global supply growth. The cap, established as part of China's broader industrial policy to curb energy-intensive production, prevents meaningful expansion even as power conditions normalize in several provinces.
This constraint is increasingly consequential as demand accelerates. New energy vehicle production in China is up 28 percent year-on-year, with each NEV containing significantly more aluminum content than internal combustion vehicles. Solar value-chain investment is sustaining healthy consumption of industrial extrusion products, while accelerated grid spending bolsters demand for conductor materials.
The widening gap between constrained supply and growing demand reinforces a constructive medium-term outlook. Fastmarkets identifies fundamental tightness as a recurring theme for aluminum in the coming years, with prices likely to continue working higher as inventories gradually erode.
Outside China, supply growth is similarly constrained. High energy costs in Europe have curtailed smelter restarts, while new capacity in the Middle East and India faces extended development timelines. Global ex-China production is expected to remain flat through 2026.