China’s Aluminum Market on the Verge of a Turnaround; Supply Surplus Gives Way to Deficit
After recording a supply surplus in the first half of 2026, China's aluminum market is now on the verge of entering a new phase—a phase in which strengthening demand from the solar, energy storage, and automotive industries could shift the market balance toward a slight deficit.
Citing Mysteel, China’s aluminum market continued to face pressure in the first half of 2026 under the influence of supply growth and relatively weak domestic demand; although prices on the Shanghai Futures Exchange (SHFE) increased compared to the same period last year.
According to the report, despite a 3% growth in supply, a 7.4% increase in exports of aluminum profiles was also unable to prevent the formation of a surplus in the market. As a result, China’s aluminum market faced an approximate surplus of 514,000 tons in the first half of the year.
However, the outlook for the second half of 2026 is assessed differently. Forecasts indicate that with improved demand in the photovoltaic, energy storage, and automotive sectors, the market balance for the full year could move toward a slight deficit of around 50,000 tons.
This development could be a sign of a gradual return of momentum to China’s aluminum market and a strengthening of the demand side in downstream industries.