If it feels like the price of aluminium has been moving ever upwards over the past six months, you’re not imagining it.
We know any price increase we push through can create pressure downstream – on quoting, on margins, and that these increases can often also result in difficult conversations for you with your customers.
So rather than simply issuing price increase notifications, we thought it might be worthwhile taking a step back and looking at what’s actually driving the price of aluminium at the moment, and why it seems to be just going up and up with no relief in sight.
Not a short-term phenomenon
Historically, aluminium prices have tended to rise and fall with familiar demand themes – construction cycles, automotive production, economic growth in China or seasonal buying patterns. When demand strengthened, prices rose; when demand eased, prices usually followed.
While that logic still applies, it no longer tells the full story. What’s different now is that global supply has become much less flexible.
Even in periods of moderate demand, prices are staying elevated because the market no longer has enough spare capacity to absorb disruption or respond quickly to spikes.
Let’s now take a closer look at some of the underlying factors driving the current operating environment.
Low inventories mean higher sensitivity
Global aluminium inventories have been drawn down steadily over the past few years and are now sitting at relatively low levels.
At the end of 2025, aluminium inventories held on and off the London Metal Exchange fell to their lowest levels in several years. ‘Shadow stocks’ – metal stored privately but available to the market – declined sharply as well. With less metal sitting in reserve, the global system has lost its ability to buffer.
Consequently, even small issues can move prices quickly because there’s less metal available to absorb the shock; things like:
- power interruptions
- shipping delays
- refinery outages
- policy or trade changes
Why supply can’t just ‘ramp up’
Now, you might say, ‘well, why don’t producers just make more aluminium?’
The reality is that expanding or restarting production today is far more complex than it used to be. There are several reasons for this:
- China, the world’s largest producer, has capped aluminium capacity at around 45 million tonnes and is enforcing stricter energy and environmental rules, meaning global markets can no longer rely on China to fill supply gaps
- In Europe, large amounts of smelting capacity are offline due to record high electricity costs
- In other regions, such as Australia, access to long-term reliable, affordable power remains uncertain
Which leads to the biggest factor of all…
Electricity is now the gatekeeper
As you’ll be aware, producing aluminium requires enormous amounts of energy. In the past, power was seen as ‘just’ a cost. Today, it has become the deciding factor in whether production is viable at all.
In many regions:
- Power prices are too high to justify restarting smelters
- Long-term electricity supply contracts are uncertain
- Aluminium production is now competing with other electricity-hungry sectors such as data centres for supply
Even where capacity exists on paper, unreliable or unaffordable power keeps real-world supply constrained – and that feeds directly into pricing.
Why recycling can’t fully offset the pressure
Recycled aluminium plays a crucial role, particularly around sustainability and emissions reduction – and its importance will only grow from here. But recycling alone cannot relieve supply pressure in the medium term and it cannot replace primary aluminium entirely. There are several reasons for this:
- Scrap availability is inconsistent
- Quality and alloy requirements can’t always be met by scrap
- Scrap flows are increasingly affected by trade controls and export restrictions
The outcome is that for many industrial applications, primary aluminium remains essential, especially where consistency, strength, or specific alloys are required.
Trade policies add another layer
Geopolitics in the form of tariffs and trade restrictions, have increasingly led to regionalised aluminium markets.
In the United States for example, significant import tariffs have pushed up local delivery premiums. Similar policies are emerging elsewhere, creating price differences that are disconnected from global averages.
This means prices can remain elevated locally even when global indicators appear to soften.
What this means for Altus® Industrial customers
The key shift for everyone involved is that aluminium pricing is now being driven more by supply security and structural constraints than by cyclical or seasonal demand, so it’s less about speculation and about structure.
And whilst markets will always move, many of the forces keeping aluminium prices elevated – energy constraints, capacity limits, trade policies, and growing competition for electricity – are complex, structural issues that are not quick or easy to resolve. That is why recent price increases may have felt more persistent than in previous cycles, and why they can be harder to unwind once they occur.
From a forward-planning perspective, one of the most effective ways to manage the current environment is early engagement. By discussing upcoming projects, volumes and timing with your Technical Account Manager, we can work your requirements into our planning processes. This will help minimise pricing surprises, support continuity of supply, and reduce the risk of avoidable delivery constraints.
Where there is a positive for Altus® Industrial customers is around continuity and availability of supply. Our extruded product offering is supported by aluminium sourced from Tiwai Point – producing some of the purest, lowest-carbon aluminium in the world – right here in New Zealand. This local supply chain provides greater certainty, resilience, and consistency at a time when global supply remains under pressure.
In parallel, customers who source sheet and plate products from Altus® Industrial can also be confident in the security of supply. These products are supported by long-established international supply chain partners, with proven capability, quality systems, and capacity. These relationships have been built and tested over many years, providing reliability and consistency even when global markets are under stress.
Closing note
We recognise the pressure the current environment places on your business. Our aim in sharing some of the context behind recent price increases is to support better planning, greater transparency, and more informed conversations – both with your customers and with the Altus® Industrial team – as we navigate these conditions together.