Aluminum prices rise by 4.86% in March
Aluminum prices remained strong in March. According to the Commodity Market Analysis System of Shengyi Society, as of March 30, 2026, the average price of aluminum ingots in the East China market was 24543.33 yuan/ton, an increase of 4.86% compared to the market average price of 22473.33 yuan/ton on March 1; Compared to the high point of the month (3.12), the market average price is 25273.33 yuan/ton, a decrease of 2.86%
In January 2026, aluminum prices continued the strong momentum of 2025, showing a fluctuating upward trend in the past year. In February, aluminum prices fell slightly. From the second half of 2025 to the beginning of 2026, some domestic aluminum plants will temporarily reduce production due to environmental restrictions, dual control of energy consumption, equipment maintenance, and other factors. Coupled with the tightening of overseas bauxite export policies and rising shipping costs, the global aluminum supply side will experience a phase of contraction, supporting the continuous rise of aluminum prices, especially forming a concentrated outbreak in January 2026. In the early stage, the market had strong expectations for the recovery of downstream fields such as new energy vehicles, photovoltaics, and infrastructure, and speculative funds entered early to push up aluminum prices; However, in February 2026, the downstream consumption peak season did not meet expectations, resulting in weak actual demand. Coupled with the impact of the Spring Festival holiday shutdown, the willingness of enterprises to reduce inventory increased, leading to a rapid price correction. The loose monetary policy in 2025 will raise the valuation of commodities, and aluminum as an industrial metal will benefit significantly; At the beginning of 2026, the market’s expectations for the Federal Reserve to raise interest rates rose, and the strengthening of the US dollar suppressed commodity prices, coupled with speculative capital taking profits, further exacerbating the decline in February. The loose monetary policy in 2025 will raise the valuation of commodities, and aluminum as an industrial metal will benefit significantly; During the price increase cycle, the continuous depletion of social inventory has strengthened the bullish sentiment in the market; In February 2026, inventory will shift from a decrease to an increase, coupled with the fermentation of pessimistic expectations, forming a negative cycle of “inventory accumulation – price decline – emotional deterioration”.
In March, with the recovery of demand, social inventory entered the channel of destocking again, and inventory data verified the logic of “demand recovery”. The logic of the rise in aluminum prices generally consists of two parts: traditional supply and demand+geopolitical risk premium. as follows:
1. Demand side: peak season resumption of work+replenishment resonance
In March, the traditional peak season for downstream industries such as infrastructure, automobiles, and home appliances in China began, coupled with the sustained high prosperity of the new energy sector (photovoltaics, energy storage, and new energy vehicles). Downstream enterprises concentrated on replenishing their inventory after the holiday, resulting in a short-term surge in demand for aluminum ingot procurement.
2. Supply side: Capacity constraints+cost support
The domestic electrolytic aluminum production capacity is limited by the dual control of energy consumption and environmental restrictions, resulting in limited incremental growth; The export policies of overseas bauxite producing countries (Guinea, Indonesia) have tightened, and the cost of smelting raw materials is running at a high level, with strong support from the bottom of aluminum prices.
3. Macro: Expectations of interest rate cuts+policies to stabilize growth
The expectation of the Federal Reserve cutting interest rates is heating up, and the weakening of the US dollar is favorable for commodities; Domestic policies aimed at stabilizing growth continue to be implemented, enhancing risk appetite for industrial metals and driving up aluminum prices through speculative capital inflows.
4. Premium transmission of the US Israel Iran geopolitical conflict
The soaring energy prices have raised the cost of smelting. Iran is an important exporter of oil and natural gas, and the escalation of geopolitical conflicts has led to a surge in international crude oil and natural gas prices. Electrolytic aluminum is a high energy consuming industry, with energy costs accounting for over 30%. The rise in oil prices directly drives up the global cost of electrolytic aluminum smelting, opening up space for aluminum price increases.
Shipping and supply chain disruptions drive up logistics costs. The Persian Gulf is an important global shipping channel, and the tense situation has led to a significant increase in oil tanker insurance fees and shipping costs. The cross-border logistics costs of bauxite, alumina, and finished aluminum ingots have also increased significantly, further pushing up spot aluminum prices.
The expectation of supply interruption amplifies market panic. If the conflict continues, it may affect energy exports and aluminum related production capacity in Iran and surrounding areas (such as Iran’s domestic electrolytic aluminum production capacity). The market is concerned about a temporary gap in global aluminum supply, and speculative funds may enter the market early to go long, further amplifying price increases.
Safe haven funds flow into commodities. When geopolitical conflicts escalate, funds tend to flow into safe haven assets such as gold and industrial metals. Aluminum, as an important industrial metal, becomes a capital allocation choice and gains an additional premium in price.
Future price forecast
Aluminum prices are expected to fluctuate at a high level and run weakly in April 2026, making it difficult to continue the upward trend in March. The domestic downstream peak season is gradually coming to an end, and the marginal demand for infrastructure, home appliances, and other industries is weakening. Downstream inventory replenishment has come to an end, and procurement is shifting towards on-demand delivery. The early maintenance capacity of the supply side has gradually resumed production, and the supply of electrolytic aluminum has rebounded. The social inventory is likely to accumulate, which will suppress prices.
If the geopolitical conflict in Iran does not escalate significantly and energy prices rise and fall, the geopolitical risk premium of aluminum prices will gradually dissipate. At the macro level, the expectation of the Federal Reserve cutting interest rates has been largely priced by the market, with limited boost to prices. Overall, the aluminum price in April may not have enough upward momentum, with a slight shift in focus and an overall pattern of oscillation and weakness. It is necessary to focus on the geopolitical situation and actual demand fulfillment.
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