Aluminium: Cycles

Why the real price has barely moved since 2010

The price was $3,283 a tonne in September 2026, 24% above a year earlier and 16% above five years earlier. The ten-year range runs from $1,460 to $3,666. In real 2010 dollars, annual averages since 2010 have stayed in a narrow band of $1,683 to $2,303. Power is the swing cost, so energy shocks drive the cycle. The 1973 oil shock plunged the industry into crisis and pushed many smelters into distress (Blas & Farchy). Large Chinese capacity tends to cap rallies, while Western smelters close when power turns dear and restart slowly.

Aluminum price

Chart: Aluminum monthly price

Chart: Aluminum annual real price

US price, US market ingot, spot (S&P Global Platts)

Super-cycles in aluminium

Aluminium shares the broad metals booms of the 1970s, 2000s and 2020s, but its long-run real price has been flat to falling, because smelting capacity can be added fairly quickly wherever power is cheap. In real 2010 dollars the 2025 average ($2,267/t) was close to 2010 ($2,173/t). Price spikes come from energy shocks, squeezes and supply curbs; slumps from capacity surges, first from the former Soviet Union in the 1990s and then from China, which grew to 46% of world output by 2013 (Humphreys 2015) and about 61% in 2025 (USGS). The nominal monthly high was $3,666/t in May 2026.

1. 1973-1982

   The oil shock raised power costs and Jamaica and other members of the International Bauxite Association, founded in 1974, sharply raised bauxite levies; Jamaican bauxite cost in the US roughly doubled in real terms in 1973-76 (Radetzki and Wårell 2021). Recession then hit demand.

   World Bank monthly price rose from $542/t (Jan 1973) to $2,131/t (Feb 1980), then fell to $919/t (Jun 1982)

2. 1987-1989

   Demand recovered while stocks were low after the early-1980s closures; traders at Marc Rich + Co bet heavily on a rise and squeezed the market in 1988 (Blas and Farchy 2021).

   From $1,171/t (Jan 1987) to $3,578/t (Jun 1988) (World Bank monthly averages)

3. 1991-1995

   After the Soviet collapse, Russian exports rose from a few hundred kt a year to over 2.5 Mt by the late 1990s; producer governments agreed a 1994 memorandum of understanding to cut output in coordination (Humphreys 2015).

   Fell to $1,040/t (Nov 1993), then rose to $2,061/t (Jan 1995) (World Bank monthly averages)

4. 2003-2009

   Chinese industrial growth lifted all metals; the 2008 crisis then cut prices by more than half.

   From $1,332/t (Apr 2003) to $3,071/t (Jul 2008), down to $1,330/t (Feb 2009) (World Bank monthly averages)

5. 2020-2026

   Post-Covid demand, Chinese power rationing and the 2022 European energy crisis, sanctions on Russia, China's output reaching its capacity of about 45 Mt, and 50% US tariffs from June 2025 (USGS).

   From $1,460/t (Apr 2020) to $3,498/t (Mar 2022), then a record $3,666/t (May 2026) (World Bank monthly averages)

What drives the cycle

• Electricity and carbon costs. Power is the largest variable cost of smelting, so energy shocks and carbon pricing move the cost curve and can close high-cost smelters fast.
• China's supply policy. China makes about 61% of world metal (USGS 2025); its capacity ceiling, power policy and export taxes decide whether the world is in surplus.
• Lightweighting and electrification. EVs, solar frames, grids and cans drive demand growth beyond construction.
• Bauxite and alumina supply. Guinea supplies a third of bauxite and China depends on it; licence disputes, export bans (Indonesia 2023) and refinery outages hit alumina prices first.
• Trade policy and sanctions. US tariffs, sanctions on Russian metal and anti-dumping duties redirect flows and widen regional premiums.

Metrics to track