Aluminum prices suffered their most severe single-day decline in 2026 on June 22, with COMEX futures plunging 5.9% to $3,475/mt. The move extended a two-week selloff that has erased 12% from a June 8 high of $3,954/mt. The trigger: Chinese semi-fabricated aluminum exports hit 980,000t in May, an 18% year-on-year surge, according to Chinese customs data. The export wave is overwhelming end-user demand outside China.
The export surge reflects China's strategy of shifting value-added production overseas. Chinese fabricators are exporting extrusions, sheet, and foil at margins that undercut local producers in Europe, Southeast Asia, and North America. EU industry groups have flagged the trend as a potential anti-dumping trigger.
Demand outside China is showing signs of strain. European aluminum buyers are destocking, with spot premiums in Rotterdam falling to $180-200/t over LME cash, down from $250/t in April. US Midwest premiums held firmer at $0.22-0.24/lb, supported by domestic smelter curtailments and Section 232 protection.
The bull case for aluminum depends on production discipline. Global ex-China smelter capacity is running at 76% utilization, down from 82% in 2025. European smelters are idling capacity as power costs remain high. Without these curtailments, prices would likely be testing $3,200/mt.
The 5.9% drop creates an entry opportunity, but the trend is still negative. Chinese export volumes are the key variable — if May's 980,000t pace holds, further downside to $3,200-3,300/mt is possible. For buyers, waiting for stabilization is reasonable, but partial coverage at $3,400-3,500/mt limits downside risk if smelter cuts accelerate. Watch LME spreads for nearby tightness signals.