Restricted trade from the Gulf countries through the Strait of Hormuz and EGA’s Al Taweelah smelter becoming inoperative for a year due to Iranian strikes are seen as an opportunity for China’s aluminium export growth by many market analysts. Whether this ambition may turn real or not is something to be assessed, but it stems from the void being caused in the market due to the Gulf region's inability to serve the global aluminium demand at this moment. The Gulf not only produces 10 per cent of the world’s aluminium but also supports the global supply chain by contributing 9 per cent to the total. In figures, Gulf countries export more than 5 million tons of wrought and unwrought aluminium to the world. As per the International Trade Administration data of 2025, Bahrain exports 1.36 million tons, the UAE 2.38 million tons, Oman 309,180 tons, Qatar 691,648 tons, and Saudi Arabia 473,937 tons.
The Strait of Hormuz is under restriction as a strategic decision of Iran, with no definitive timeline for a full reopening. If this is adding to the uncertainty of the global supply chain, operational reduction and even shutdown are further triggering tensions. With Qatalum maintaining aluminium production at 60 per cent of its capacity, Alba cutting 19 per cent of the production at Potline 1, 2, and 3, and EGA halting operations at a smelter with a nameplate aluminium capacity of 1.5 million tons per annum for a year, quick mitigation is not available in the market, except the fact that some countries or regions can emerge as alternative sources.
China’s strategic position and price advantage
China hopes to become one such country, supporting the global demand with its exports. Kiki Xi, an analyst at consultancy Aize China, said: "It's difficult for the aluminium production lines that sustained damage to recover in the short term, and that will likely lead some orders to flow to China. We are optimistic about exports this year."
China also expects the price difference between its domestic aluminium and the global LME will convince the overseas buyers to bank upon China as a cost-effective source. Aluminium prices on the London Metal Exchange have surged by 12 per cent since late February, coming in at USD 3,505 per ton, while China’s aluminium price has increased by only 4.5 per cent. From RMB 23,410 per ton (USD 3,413.83) on February 27, China’s domestic aluminium price has increased to RMB 24,480 per ton (USD 3,569.87). Although the value is higher than the LME price, the subdued growth rate offers optimism for higher orders. Chinese aluminium price peak was only on March 5 and March, when it touched RMB 25,120 per ton (USD 3,663.2) and RMB 25,200 per ton (USD 3,674.86), respectively.
Reports suggest that aluminium exporters in China are seeing a jump in inquiries. Export profits are also growing, especially for aluminium sheets used for food cans and aerospace. According to two Chinese traders, exports climbed 43 per cent M-o-M to as much as USD 590 per ton, as of March 26.
Here’re the revised projections for China exports
In this background, Fastmarkets has revised its projections for Chinese aluminium exports, expanding to 12-18 per cent compared to the prior outlook of potentially flat to slightly negative. Broker Wuchan Zhongda Futures has lifted its forecast to 10 per cent from 5 per cent for Chinese aluminium exports. Consultancy Aladdiny predicts fabricated aluminium product exports to grow between 5 per cent and 10 per cent in 2026.
China, on average, exports a little more than 6 million tons of aluminium. In 2025, export volume dipped Y-o-Y but still remained at 6.122 million tons versus 6.66 million tons in 2024. The volume is more than what GCC countries export, but compared to the domestic production, it stands minuscule. Despite an annual output close to 45 million tons, China contributes its minimum share to the world, as vast output is consumed domestically.
Going by the projections for this year, China’s aluminium exports are likely to stand at around 6.73-7.22 million tons. This additional volume of exports can be possible only due to the nation’s subdued domestic demand at present. According to an update in mid-March, China’s aluminium inventories touched above 1.3 million tonnes, the highest level since 2020. Two weeks later, the inventory showed no sign of receding but grew further by accumulating 38,000 tons W-o-W on April 2.
Who stands a fair chance to benefit from China?
However, much before the West Asian conflict, a rise in China’s aluminium exports set in. Export volume grew by 13 per cent in the first two months of 2026, as producers moved to offload excess inventory into overseas markets.
If China’s aluminium exports manage to reach up to 7.22 million tons by the end of 2026, which is 1.1 million tons higher than the volume in 2025, then it will be close to offsetting the void to be created by Al Taweelah’s non-operation for a year. But in case Alba and Qatalum continue to operate at a lower rate and the Strait of Hormuz remains under restrictions, then who else will make up the deficit besides China?
Russia can emerge as another potential source for a few regions. Japan, due to the West Asian crisis, has already turned to Russia for primary aluminium sourcing for auto-parts manufacturing. Reports from various sources suggest that Japanese auto-parts manufacturers have been in talks with RUSAL for over a week now to secure primary foundry alloys (PFAs), containing aluminium. In addition, some South Korean auto-parts makers are also negotiating with RUSAL for PFAs’ supply, the critical raw materials used to produce wheels, engine blocks, and cylinder heads in the automotive industry. South Korea has been absorbing Russian aluminium, with 2026 volume projected just below 500,000 tons.
Asia is currently one of the top export destinations for Russia, as also indicated by RUSAL’s 2025 financial report, with revenue from Asia increasing from USD 5.2 billion to USD 7.67 billion.
GCC countries’ top aluminium export destinations are Japan, South Korea, the United States, and the European Union, while China’s top destinations include the United States, India, Mexico, South Korea, and Vietnam. However, of all the top export destinations of China, the United States imports the least volume (149,721 tons). Mexico imports the highest (612,161 tons), followed by India (471,648 tons), South Korea (450,694 tons), and Vietnam (410,260 tons).
South Korea’s established trade relations with China place the nation in an advantageous position to secure more aluminium from China and fulfil the supply gap caused by the West Asian conflict. Japan, meanwhile, can find an interim solution with Russia. Ultimately, the question remains who would feed the Western countries until the GCC aluminium market resumes at scale. In an interview, Jean Simard, President & CEO of the Aluminium Association of Canada, has revealed that current market conditions are incentivising Canadian aluminium flows toward the US market despite the tariff.
Source：AL Circle