Aluminium
LME
Congealed electricity: every tonne of aluminium is roughly 14 megawatt hours of power in solid form.
Top Producers
share of 2024 primary smelter production
Top Consumers
share of 2024 primary consumption
Main Uses
share of 2024 aluminium demand by end use (IAI / CRU)
Top Exporters
share of 2024 primary aluminium exports (UN Comtrade / IAI); China barely exports primary metal, so the seaborne trade is supplied by Russia, the Gulf, Canada, and India
Top Importers
share of 2024 primary aluminium imports (UN Comtrade); China is largely self-contained in primary metal and a net exporter of semi-finished products
World primary production
roughly 73 million tonnes
as of 2024
China share of primary output
roughly 60 percent
as of 2024
Electricity per tonne smelted
roughly 14 to 15 MWh
as of 2025
Record LME price
$4,073 per tonne
March 2022
China capacity cap
roughly 45 million tonnes per year
as of 2025
Aluminium is an energy trade wearing a metal costume. Smelting one tonne takes roughly 14 to 15 megawatt hours of electricity, so smelters are built where power is cheap and die where it is not, and the aluminium price tracks the cost of energy more faithfully than any other metal. The 2021-2022 European energy crisis proved it: smelters across Europe curtailed or closed as power prices made every tonne a loss, and LME aluminium hit its all-time record of $4,073 a tonne in March 2022 in the first days of Russia's invasion of Ukraine. The raw material chain has its own pressure points: it takes roughly four to five tonnes of bauxite to make two tonnes of alumina to make one tonne of metal, and when Guinean bauxite shipments and Australian alumina refineries hit trouble in late 2024, alumina prices roughly doubled to a record above $800 a tonne.
China makes roughly 43 million of the world's roughly 73 million tonnes of primary aluminium, and the single most important policy number in the market is Beijing's capacity cap of roughly 45 million tonnes, imposed in 2017 to curb coal-fired smelting. As Chinese output pressed against that ceiling through 2024 and 2025, Chinese companies took the playbook offshore, building large new smelters in Indonesia next to captive coal and hydro power. The other defining policy story is Russian metal: after April 2024 the LME could no longer accept newly produced Russian aluminium following US and UK sanctions, leaving older Russian stock to dominate LME warehouses while Western buyers self-sanctioned and paid premiums for non-Russian units.
On the exchange, aluminium is the LME's flagship: the highest-volume contract, the deepest forward curve, and the home of the warehouse financing trade. The persistent contango that finances metal in storage made aluminium the center of the 2010s queue scandal, and LME stock figures remain as much a statement about financing economics as about physical surplus.
How It Trades
| Venue | LME (global benchmark), SHFE (China), CME aluminium and regional premium contracts |
| Benchmark contract | LME Aluminium 3-month forward |
| Contract size | 25 tonnes |
| Price terms | USD per tonne |
| Settlement | Physical delivery of LME warehouse warrants on the prompt date; regional physical premiums (US Midwest, European duty-paid, Japan MJP) trade separately on top of the LME price. |
| Typical curve | Persistent contango that funds warehouse financing trades, punctuated by backwardation in genuine shortage episodes such as 2021-2022. |
| Liquidity | The most actively traded LME contract by volume; deep liquidity along the curve out several years. |
Where It Trades
approximate share of global daily exchange volume, 2025
Supply and Demand
Top producers
- China: roughly 43 million tonnes of primary metal, roughly 60 percent of the world, capped near 45 million tonnes by policy
- India: roughly 4 million tonnes
- Russia: roughly 3.8 million tonnes (Rusal), barred from new LME delivery since April 2024
- Canada: roughly 3.3 million tonnes, hydro-powered and tariff-exposed to the US market
- United Arab Emirates, Bahrain, Australia, Norway: roughly 1 to 2.7 million tonnes each
Bauxite supply is concentrated in Guinea and Australia; Guinea alone supplies roughly two-thirds of China's bauxite imports, making Guinean politics a recurring alumina price driver. Recycled (secondary) aluminium adds roughly 35 million tonnes on top of primary output.
Top consumers
- China: roughly 60 percent of world primary consumption
- European Union
- United States
- Japan, India, South Korea
Major uses
- Transport: roughly 30 percent (vehicles, aircraft, EV body lightweighting)
- Construction: roughly 25 percent
- Packaging: roughly 15 percent (cans, foil)
- Electrical (cables, where it substitutes for copper) and machinery: most of the rest
What Moves the Price
- Power prices: electricity is roughly a third of smelting cost, so energy crises are aluminium crises
- Chinese output against the roughly 45 million tonne capacity cap
- Alumina and bauxite supply, concentrated in Guinea and Australia
- Sanctions and tariffs on Russian metal and on US imports
- Regional physical premiums signaling real tightness beneath the LME price
- LME stock movements and financing-trade economics
- Chinese credit impulse and global manufacturing PMIs
Moments That Made the Market
1886
Hall and Heroult independently invent electrolytic smelting, turning a precious metal into an industrial one.
1978
The LME launches its aluminium contract, which becomes the exchange's most traded product.
2008
Price peaks above $3,300 a tonne in July, then collapses; the post-crisis surplus flows into financing deals.
2013
US Senate hearings on warehouse queues; Detroit load-out waits exceed 600 days and the LME begins rewriting its warehousing rules.
2018
US sanctions on Rusal in April send aluminium up roughly 30 percent in days before Washington reverses course.
2022
European smelter closures in the energy crisis; record $4,073 a tonne in March after Russia invades Ukraine.
2024
US and UK sanctions bar new Russian metal from the LME in April; alumina spikes to a record above $800 a tonne late in the year.
What Changed Since the 2010 Handbook Era
- China went from roughly 40 percent of world output in 2010 to roughly 60 percent, then capped itself, pushing the next wave of smelters to Indonesia.
- Energy crises replaced demand cycles as the defining price events, with the 2021-2022 European shock setting the all-time high.
- Russian metal went from market staple to sanctioned stock that splits the market into Russian and non-Russian price tiers.
- The warehouse queue scandal forced wholesale reform of LME warehousing and changed how everyone reads exchange inventories.
- Carbon accounting arrived: low-carbon hydro aluminium earns a premium, and the EU carbon border adjustment mechanism reaches aluminium imports from 2026.