Global primary aluminium output holds firm in Q1CY'26 as China counters GCC headwinds

• GCC output decline driven by West Asia tensions
  
  
• China's steady production supported overall global output resilience
  
  

Global primary aluminium production stood at 18.33 million tonnes (mnt) in Q1CY'26, marking a 1.2% year-on-year (y-o-y) increase from 18.11 million tonnes in Q1CY'25 according to data from the International Aluminium Institute. The modest growth in output reflects generally stable operating conditions across major smelting regions, supported by resilient utilisation levels in China and recovery trends across parts of Europe and Oceania. Overall, production levels remained firm, indicating continued operational stability across key global aluminium-producing hubs and supporting a broadly steady near-term supply outlook.

Regional drivers shaping global primary aluminium output in Q1CY'26

Global primary aluminium production in Q1CY'26 exhibited varied regional trends, reflecting a mix of energy availability, cost competitiveness, smelter utilisation adjustments, and geopolitical disruptions across key producing regions, with West Asia emerging as a critical factor influencing near-term global supply conditions.

China, the world's largest aluminium producer, increased output by 1.6%, supported by policy-controlled capacity caps near 45 million tonnes and resilient domestic downstream demand, which helped maintain stable operating rates across smelting hubs despite evolving global supply uncertainties.

In Africa, production declined by 3.3% y-o-y, primarily due to power supply constraints and operational adjustments at major regional smelting facilities, which continued to weigh on output stability.

North America experienced a marginal decrease of 0.6%, as elevated electricity costs and structural competitiveness pressures continued to limit smelter utilisation levels across the region.

South America's output also contracted by 0.8%, mainly because of legacy smelter under-utilisation and power-availability constraints across older production centres.

Conversely, Asia excluding China recorded a 1.4% increase, supported by stable operating rates and steady downstream demand conditions across key regional smelting hubs.

Europe, including Russia, posted a 3.9% y-o-y increase, supported by recovery from earlier energy-related curtailments and improving power-cost stability, enabling several smelters to raise utilisation levels.

Oceania's aluminium production increased by 2%, supported by stable hydropower-linked smelting operations and improved facility utilisation across major regional plants.

Aluminium production in the Gulf Cooperation Council (GCC) region declined 1.8%, with March average output dropping 6% m-o-m to 15,963 t per day from 16,997 t in February, according to the International Aluminium Institute. The downturn followed disruptions from the US Israel Iran conflict that began on February 28, with a fragile ceasefire in place since April 8. Transit through the Strait of Hormuz, a key corridor for most Gulf aluminium exports, remains blocked, disrupting both outbound shipments and inbound supplies of bauxite and alumina.

The GCC, which contributes about 6.5 mnt in 2025 or roughly 9% of global supply, saw major setbacks after strikes on Emirates Global Aluminium and Aluminium Bahrain in early March. EGAs Al Taweelah smelter may take at least 12 months to restore, while Alba declared force majeure on March 4. With smelters drawing down inventories and restart timelines extending to months, supply risks are expected to persist globally.

Finally, the estimated unreported production to the International Aluminium Institute remained unchanged, representing stable output from regions or producers not formally reporting.

Impact of pricing

On a Q1CY basis, LME aluminium prices averaged $3,249/t in Q1CY'26, marking a strong increase from $2,622/t in Q1CY'25. Meanwhile, LME inventories declined by around 18% y-o-y, averaging 463,554 tonnes compared with 555,631 tonnes during the same period last year, reflecting continued tightening in exchange-reported availability.

In Jan'26, prices remained supported by tight physical availability and continued inventory drawdowns, with LME cash offers rising above $3,180/t during the month. Firm Asian reference market premiums and lower warehouse stocks helped sustain upward price momentum.

In Feb'26, aluminium prices continued to remain firm as exchange inventories trended lower and Asian benchmark prices strengthened, supported by visible stock declines and steady downstream demand from manufacturing and energy-transition sectors, reinforcing support for LME price levels.

Moreover, in Mar'26, aluminium prices strengthened further, with LME cash offers moving above $3,500/t and prices nearing multi-year highs, supported by continued inventory declines and rising geopolitical tensions affecting Gulf smelting operations and regional shipping routes, which amplified supply-side concerns and helped sustain elevated price levels.

Outlook

Global primary aluminium production is expected to remain exposed to regional supply risks in the near term, with developments in West Asia-particularly across the GCC region-continuing to influence market balance conditions. The GCC accounts for nearly 8-9% of global primary aluminium output, and recent Iran-related tensions have already weighed on March smelter operations, highlighting the region's growing importance in shaping short-term supply visibility.

Any prolonged disruption around the Strait of Hormuz, a critical corridor for both alumina inflows and aluminium exports, could affect shipment flows from key Gulf producers and tighten physical availability across Asia and Europe. While stable production trends in China and recovery across parts of Europe and Oceania are supporting overall global output growth, continued uncertainty around GCC smelter activity and regional logistics conditions is expected to keep exchange inventories relatively tight and physical premiums supported, sustaining firmness in global aluminium market fundamentals in the coming months.