According to the Frankfurter Rundschau, China dominates global trade in aluminum, one of the world’s most important metals. Production cuts could soon drive prices higher, while tariff pressures further compound the situation.

Not long ago, automotive parts suppliers warned that China’s dominance in rare earths had already created supply shortages. Now, reduced supply, rising demand, and tariffs imposed by U.S. President Donald Trump are pushing aluminum prices higher globally. On the London Metal Exchange, a key global benchmark, aluminum prices have risen by approximately 17 cents since their April low. Once again, China plays a critical role in this dynamic.

Analysts believe the situation could worsen in the coming months. China’s production restrictions have led to aluminum supply shortages, while production capacity in other parts of the world remains limited. The Financial Times quoted Thomas Strobel, a strategist at Italy’s UniCredit, as saying: “We expect aluminum prices to rise by the end of the year, driven by sustained demand from China’s economic stimulus measures and limited capacity.”

Rising U.S. tariffs and low global inventories could create bottlenecks. Analysts at Bank of America expect that the aluminum market surplus in 2025 could turn into a deficit by 2026. By the end of 2026, prices could rise to $3,000 per ton, compared to the current level of approximately $2,700.

A key factor is China’s enormous influence in the aluminum market. China accounts for nearly 50% of both global production and consumption. As early as 2017, China began capping annual production — according to Bloomberg, at 45 million tons per year — citing “excess inventories and emissions issues” as justification.

Official data released in January 2025 showed that China’s aluminum production exceeded 43 million tons in 2024, a record high. As a result, China had to cut production, reducing the amount of aluminum available for export. However, in 2024, there was still a significant surplus, which flowed to Western countries through massive exports, raising concerns.

Shanghai Nonferrous Metals Network estimates that China’s aluminum production will grow by approximately 2.0% in 2025, compared to 3.9% growth in 2024. A real decline is expected in 2026, when production growth may slow to just 0.7%.

Aluminum is considered the most common metal on Earth. Market research firm Research and Markets notes that it accounts for about 8% of the Earth’s crust and is the world’s most widely used metal after steel.

Germany is heavily dependent on aluminum. In 2023, Germany imported approximately $6.45 billion worth of primary aluminum (equivalent to about €5.45 billion), making it the world’s second-largest aluminum importer. According to data from the Observatory of Economic Complexity (OEC), the main sources of imports include the Netherlands, the United Arab Emirates, and Norway.

The aluminum issue echoes current debates over rare earths and other critical raw materials. In these areas, China also holds a dominant position (even more so than in aluminum) and has implemented export restrictions that have already caused supply tensions in Western countries. These restrictions are a response to U.S. tariffs and other trade barriers.

Beyond China’s dominance, the second major problem facing the aluminum market is U.S. President Donald Trump. In February 2025, he announced sweeping tariffs on products containing steel and aluminum components. The initial list covered 407 product categories, with an additional 60 still under review. For already-taxed product categories, a 50% tariff will be applied based on the proportion of steel and aluminum content. Affected products include motorcycles, mopeds, door and window frames, sports equipment, and lifting vehicles. Since Trump’s tariffs target the steel and aluminum components rather than the finished products themselves, companies must calculate the specific proportions to determine the actual tariff level.

Machinery manufacturers are already concerned about declining sales. Germany’s ZDF television reported on the case of a combine harvester that was originally priced at €500,000 for export to the U.S., but due to Trump’s tariffs, the price suddenly increased significantly. “American customers have almost overnight had to pay €750,000,” ZDF quoted company head Bernard Krone as saying. “That’s obviously a huge amount, and U.S. customers may think twice about whether they will buy new shredders in the coming years.”