# Aluminium: Trading

How the LME came to price everything from alumina to foil

Source page: https://www.materialinsights.org/commodities/aluminum/trading/

What this tab covers How and where it is bought and sold: who buys and sells, exchanges and benchmarks, contract types, the big trading houses and how prices are discovered.

Pricing moved from producers to the LME, where aluminium trading began during the 1970s and 1980s (Tilton & Guzmán). Soon every stage, from alumina to foil, was benchmarked to LME quotes (Blas & Farchy). SHFE sets the Chinese price, and MCX lists aluminium in India. Buyers pay the exchange price plus a regional premium. The US spot ingot price rose 39% in 2025 as tariffs reached 50%. Traders reshaped the market: in the 1980s Marc Rich + Co supplied alumina to smelters and took their metal as payment, a deal called tolling.

#### Where it is bought (buyers)

- Rolling mills, extruders and foundries in China, the US, Europe, Japan and Korea buy ingot, billet and slab under annual contracts at LME plus a regional premium
- Chinese refineries buy bauxite from Guinea and Australia; China took 87% of world bauxite imports by value in 2024 (UN Comtrade)
- Non-integrated smelters buy alumina from Australia, Brazil and India

#### Where it is sold (sellers)

- Smelters in Canada, India, Malaysia, Norway, Australia, Bahrain and the UAE sell metal abroad; Canada led unwrought aluminium exports by value in 2024 (14.7%), India was second (8.5%) (UN Comtrade)
- Australia supplied 67% of world bauxite exports by value in 2024 (UN Comtrade); Guinea ships mostly to China
- Recyclers sell secondary alloy to die-casters and remelt scrap to rolling mills

#### Exchanges and benchmarks

| Venue | Contract | Notes |
|---|---|---|
| **London Metal Exchange (LME)** | Primary Aluminium, 25 t lots (also Aluminium Alloy and NASAAC) | Global reference price |
| **Shanghai Futures Exchange (SHFE)** | Aluminium, 5 t lots; alumina futures | Chinese domestic price; alumina futures add transparency to the input |
| **CME Group (COMEX)** | Aluminium Midwest premium (Platts) futures | Hedges the US delivered premium, now dominated by tariffs |
| **MCX (India)** | Aluminium futures in rupees per kg | Indian reference for downstream users |

#### Contract types

- Annual metal supply contracts at LME average plus a fixed or quarterly premium (Japan's MJP is set quarterly)
- Alumina once priced as a percentage of the LME aluminium price (Jamaica sold at 9.25% in a 1980s deal with Marc Rich + Co); now mostly index-priced
- Tolling: a trader supplies alumina and takes the metal produced as payment, pioneered in aluminium by Marc Rich + Co in the 1980s
- Spot ingot and scrap trades priced off LME or SHFE

#### Top trading houses

- Glencore
- Trafigura
- Mercuria

#### How prices are discovered

- LME official prices and SHFE futures
- Regional premiums assessed by S&P Global Platts (US Midwest) and Fastmarkets (Rotterdam duty-paid)
- Alumina indices from Platts, Fastmarkets and SMM
- AL Circle and SMM for Indian and Chinese market prices

## Other sections

- [Summary](https://www.materialinsights.org/commodities/aluminum/index.md)
- [Overview](https://www.materialinsights.org/commodities/aluminum/overview/index.md)
- [Correlation](https://www.materialinsights.org/commodities/aluminum/correlation/index.md)
- [Extraction](https://www.materialinsights.org/commodities/aluminum/extraction/index.md)
- [Production](https://www.materialinsights.org/commodities/aluminum/production/index.md)
- [Stocks](https://www.materialinsights.org/commodities/aluminum/stocks/index.md)
- [Cycles](https://www.materialinsights.org/commodities/aluminum/cycles/index.md)
- [Movement](https://www.materialinsights.org/commodities/aluminum/movement/index.md)
- [Criticality](https://www.materialinsights.org/commodities/aluminum/criticality/index.md)
- [Characteristics](https://www.materialinsights.org/commodities/aluminum/characteristics/index.md)
- [Emissions](https://www.materialinsights.org/commodities/aluminum/emissions/index.md)
- [Relationships](https://www.materialinsights.org/commodities/aluminum/links/index.md)