China exported an estimated 580,000 tonnes of unwrought aluminum and aluminum products in May 2026, up 12% from April and 9% above May 2025 levels. Year-to-date exports through May total roughly 2.6 million tonnes, putting 2026 on track to exceed the 6.1 million tonnes exported in 2025. The surge is a direct consequence of China’s record primary aluminum production colliding with softening domestic demand.
The property sector — which accounts for roughly 25% of Chinese aluminum consumption — continues to struggle. Housing starts were down 8% year-over-year through May, and completions, which drive aluminum extrusion demand, fell 6%. Manufacturing activity, as measured by the official PMI, slipped below 50 in May. The result: more aluminum leaving China’s shores at competitive prices.
The impact on regional premiums has been immediate. The Japanese aluminum premium (MJP) for Q3 delivery settled at roughly $85 per tonne, down $20 from Q2 and the lowest since Q4 2024. European duty-paid premiums have fallen to approximately $195 per tonne, down $35 from the Q2 peak. With LME aluminum itself falling, the all-in price for buyers in Asia and Europe has declined sharply.
The question for H2 is whether Chinese exports can be sustained at this pace. If LME aluminum falls below $3,000, Chinese smelter margins turn negative even with lower alumina costs. Chinese smelters may then cut production rather than export at a loss — at which point the export surge reverses and global premiums rebound. But for now, the flow is heavily in one direction: out of China, into the world.
The flood of Chinese aluminum exports is compressing premiums globally. Buyers in Asia and Europe should take advantage — Q3 premiums are the lowest in over a year. Lock in term contract premiums now while Chinese smelters are still exporting aggressively. If LME falls far enough to trigger production cuts, premiums could snap back quickly. The window for negotiating favorable terms on Asian and European supply contracts is open now and may not last through Q3.