Analysis and Forecast for Aluminum Prices: A Clear Fragmentation Where Prices Depend Not Only on Global Supply and Demand but Are Also Influenced by Tariff Policies, Shipping Costs, and Energy.

Analyzing and Forecasting Aluminum Prices: A Clear Fragmentation, with Prices Influenced Not Only by Global Supply and Demand but Also by Tariffs, Shipping Costs, and Energy.

Aluminum Market Overview in Q2 2025

Global aluminum prices in the second quarter of 2025 present a complex picture, with trends varying by region. According to Investing.com and Metal.com, aluminum prices on the London Metal Exchange (LME) remained high throughout the quarter. The main drivers for this upward trend were rising production costs, especially energy costs in Europe, and protectionist trade policies in North America.

Experts note that despite macroeconomic challenges and inflation, demand from key industries like electric vehicles (EVs), aerospace, and infrastructure remains strong enough to support prices. “We are seeing a clear fragmentation in the aluminum market,” said a senior analyst at TradingView. “Prices aren’t just dependent on global supply and demand; they’re also heavily influenced by tariff policies and shipping costs.”

North America: Price Increases Due to Protectionist Policies and Supply Shortages

In Q2 2025, the price of aluminum sheet (1100-H14) in the U.S. increased by 2.4% from the previous quarter, with a sharp jump of 6.0% in June alone. This price increase wasn’t driven by strong demand but was a direct result of U.S. trade policies, most notably the doubling of Section 232 tariffs on imported raw aluminum.

Price Drivers: The tariff increase to 50% in June disrupted the supply of raw aluminum used to produce aluminum sheet. Since the U.S. doesn’t have sufficient domestic production capacity, this created a supply bottleneck. As a result, the Midwest premium—an added fee for aluminum delivered in the U.S. Midwest—soared to a record $1,323/MT. This premium is added to the price before production, increasing the final cost of the product regardless of its origin.

Supply and Demand Situation: Supply was tightened by tariff policies. Meanwhile, demand from major consuming sectors like packaging, automotive, and residential construction showed signs of weakening. Consumers began looking for alternative materials, especially in the packaging industry. However, despite declining demand, the shortage of low-cost raw material supply pushed aluminum sheet prices higher.

Expert Opinion: According to a report from S&P Global, “Tariff policies have created an artificial market where prices are driven up by supply shortages rather than actual demand.” This poses a risk of cost inflation for aluminum-dependent industries.

North American Aluminum Price Forecast for the Rest of the Year: Aluminum sheet prices in this market leveled off in July after June’s increase. Prices in the North American market, particularly in the U.S., are expected to be less volatile. The Midwest premium remains high with no signs of tariff reduction. Unless tariff policies change or tariff-exempt raw material sources become available, aluminum sheet prices are expected to remain high, despite weak demand momentum.

Asia-Pacific: Volatility Due to Logistics Costs

In Malaysia, aluminum sheet prices dropped by 4.0% in Q2 2025. This fluctuation was the result of a combination of rising logistics costs, inconsistent purchasing activity, and weak domestic demand. Logistics was a key factor impacting aluminum prices in the Asia-Pacific region.

Price Drivers: Although prices surged in June, the main reason was a spike in sea freight costs from Chinese ports, not increased demand. Shipping route adjustments, port congestion, and environmental inspections in China all contributed to higher logistics costs. Although Chinese aluminum smelters were operating near full capacity, domestic supply remained tight due to increased exports. However, logistics costs were the main price-driving factor. Furthermore, the boom in the EV industry in the Asia-Pacific region is also seen as a long-term driver for higher prices, as demand for aluminum sheet will increase.

Supply and Demand Situation: Demand in Asia-Pacific countries generally remains sluggish. The construction and manufacturing sectors are struggling with limited projects and tight funding. However, demand for aluminum sheet from the EV industry shows promising long-term growth.

Expert Opinion: An analyst from Metal.com noted: “The Asian market is in a ‘wait-and-see’ state as importers try to balance high shipping costs with sluggish domestic demand. Real growth will come from major infrastructure projects, and the biggest hope is placed on the booming EV sector.”

Asia’s Aluminum Price Forecast: Aluminum sheet prices in Asia are predicted to stabilize or decline slightly in the final months of the year as freight rates decrease and inventory accumulation slows. The expert outlook leans toward a slight price decrease. This forecast is contingent on the construction and manufacturing sectors not picking up significantly, Chinese export supply not tightening considerably, and U.S. tariff policies remaining unchanged. In the long term, demand for aluminum sheet from the EV industry will be a promising growth signal for aluminum prices in this region.

Europe: Price Increases Driven by Automotive and Aerospace Demand

In Germany, aluminum sheet prices increased by 0.5% in Q2 2025, driven by improved market sentiment and persistently high production costs.

Price Drivers: The second quarter began with a 3% price drop due to an excess of raw material supply, but this trend reversed in May and June as logistics costs rose and demand from the automotive and aerospace industries surged. German manufacturers were successful in passing higher input costs on to consumers, despite weakness in the construction sector.

Supply and Demand Situation: Demand from the automotive and aerospace industries was the main driver. Passenger car production in the EU has recovered, and German suppliers increased orders for new EV models. Orders for Airbus aircraft also fueled demand for aluminum sheet.

Expert Opinion: According to S&P Global, European aluminum producers continue to face major challenges related to energy costs and carbon costs under the EU’s ETS program, but stable demand from high-tech sectors has helped them maintain a price floor.

Europe’s Aluminum Price Forecast: Aluminum sheet prices in Europe are projected to remain stable in the final months of the year and stay high, solidified by June’s sharp increase. Orders from the automotive and aviation sectors remain strong, and there are no signs of a decrease in energy or shipping costs. Prices are expected to move sideways, supported by demand from high-end manufacturing and continuously rising production costs.

Middle East & Africa (MEA): Driven by Megaprojects

In the United Arab Emirates (UAE), the price of aluminum alloy sheet (AL 1100) decreased by 6.9% in Q2 2025, reflecting a volatile price cycle due to high inventory levels and shifting import patterns.

Price Drivers: Although there was an overall price decrease during the quarter, May and June saw a recovery thanks to demand from major infrastructure projects. The price drop in the quarter was mainly due to oversupply in April.

Supply and Demand Situation: Demand from major projects like the Etihad Rail, the Dubai Metro Blue Line, and high-end real estate developments has kept aluminum sheet consumption at a high level. Purchasing activity remains steady to meet project timelines, despite market volatility.

Expert Opinion: An analyst at TradingView stated: “The MEA market has a very strong underlying growth momentum, driven by massive construction projects. This makes regional aluminum sheet prices more immune to short-term fluctuations in the global market.”

Middle East and Africa Market Forecast: The price of aluminum alloy sheet increased slightly in June and continued this trend into July. Long-distance shipping costs and consistent demand from public megaprojects have outweighed private sector purchasing hesitancy. The forecast for aluminum prices in this region for the final months of the year leans toward a moderate increase. With supply risks, demand from infrastructure projects, and persistently high shipping costs, upward pressure on costs is expected.

This article is for market trend reference only. Readers should consult other sources and monitor actual market developments and related policies to make informed decisions.

Sources: Investing, TradingView, SMM Copper Morning Brief, and various internet sources.