Aluminum continues to perform strongly despite global economic shifts and regional extraction and refining challenges.

On July 25, aluminum prices on the London Metal Exchange climbed to a four-month high, closing the week at $2,656.5 and $2,657 per ton—an increase of $10.5 or 0.39%. According to reports, this rise was mainly driven by renewed optimism about Chinese demand, along with mounting pressure from global supply constraints.

On the same day, the three-month bid/ask prices rose by $7.5 per ton or 0.28%, reaching $2,655.5 and $2,656 per ton, respectively. In the following week, spot aluminum prices were recorded at $2,635.85 per metric ton, a slight pullback from the recent peak. Nonetheless, prices remain relatively elevated due to a combination of supply constraints and renewed demand from infrastructure projects in major economies.

Key Drivers of Price Movements

According to market observers, the current rally in aluminum prices is attributed to several factors, led by China’s production cap policies. Although China is the world’s largest aluminum producer, it is nearing its annual ceiling of 45 million metric tons—a policy aimed at curbing carbon emissions. This has led to expectations of reduced output in the second half of the year.

Rising demand from fast-growing sectors such as electric vehicles and renewable energy is also a key stabilizing force. Meanwhile, the European Union is ramping up investments in defense manufacturing, boosting demand for industrial metals like aluminum. Continued sanctions on Russia, a major aluminum exporter, have further constrained supply to European markets.

Other contributing factors include:

- Rising energy costs, as aluminum smelting is highly electricity-intensive.

- Trade disruptions, including escalating tariffs that are reshaping global aluminum flows.

- Supply chain volatility and increased demand from infrastructure projects.

Impact of Tariff Policies on Producers

In North America, tariff policies—especially under Section 232—continue to reshape the dynamics of the U.S. aluminum sector. Reports indicate that while domestic production remains strong, supply is increasingly supported by imports, particularly from Canada and Middle Eastern countries.

The industry was jolted in June when the U.S. doubled Section 232 tariffs to 50%, triggering major cost shifts and forcing producers to restructure supply strategies. Analysts note that producers have managed to adapt quickly despite the pressure.

For instance, Alcoa, one of the producers affected by the higher tariffs, has redirected Canadian exports to Europe and Asia while divesting non-core assets. Meanwhile, Rio Tinto, heavily reliant on Canadian exports to the U.S., incurred $321 million in tariff costs during the first half of the year. Approximately 723,000 tons of aluminum were exported to the U.S., significantly increasing cost burdens.

Outlook for the Aluminum Market

Industry leaders warn that prolonged trade tensions could dampen global aluminum consumption and curb sector growth. While some companies benefit from short-term regional supply shortages, many are preparing for deeper structural shifts should tariffs persist. Others are actively lobbying for exemptions.

Still, there are positive indicators supporting the market in the near term. Beijing has announced a ¥1.2 trillion hydroelectric dam project, signaling government intent to stimulate the economy through infrastructure investment. The project is expected to boost aluminum demand in construction, energy, and transportation sectors.

However, strict energy consumption policies in China—particularly in provinces like Yunnan and Inner Mongolia—have reduced output, further tightening global supply and increasing price volatility.

Amid these disruptions, India is emerging as a new growth market. With abundant bauxite reserves and an expanding downstream industry, India’s aluminum sector continues to gain momentum. Analysts forecast sharp increases in domestic demand over the coming years, driven by infrastructure development and rising activity in the transport sector.

US stock indices climbed during Thursday’s trading session following the release of key economic data and a rally in the tech sector driven by Microsoft’s earnings.

Government data showed that the core Personal Consumption Expenditures (PCE) price index — the Federal Reserve’s preferred inflation gauge — held steady at 2.8% year-on-year in June.

Another report revealed that the US Employment Cost Index rose by 0.9% in the second quarter, surpassing expectations of a 0.8% increase.

Meanwhile, initial jobless claims in the US rose by just 1,000 to 218,000 in the week ending July 26, up from the previous week’s unrevised reading of 217,000. Analysts had expected claims to rise to 222,000.

The Nasdaq and S&P 500 both hit new record highs after Microsoft and Meta Platforms reported strong revenue and earnings for the second quarter of 2025.

As of 16:24 GMT, the Dow Jones Industrial Average had fallen by 0.3% (156 points) to 44,305, while the broader S&P 500 rose by 0.2% (11 points) to 6,374, and the Nasdaq Composite climbed 0.5% (109 points) to 21,239.

Copper prices dropped sharply during Thursday’s trading session, weighed down by a stronger US dollar and market reaction to the latest tariff measures introduced by President Donald Trump on the industrial metal.

The White House announced in an official statement on Wednesday that President Trump had signed a proclamation to impose a 50% tariff on certain copper imports, citing national security concerns.

According to a fact sheet released by the White House, the measure targets semi-finished copper products and derivatives with high copper content, effective August 1st.

The statement clarified that the new tariffs will not apply to copper scrap or primary input materials used in copper production, such as ores, concentrates, mattes (partially smelted products), cathodes, and anodes.

This move follows a Section 232 investigation initiated in February at the direction of President Trump.

In addition to the tariffs, the presidential order calls for measures to support the domestic copper industry, including requiring US producers to sell 25% of high-quality copper scrap generated within the country into the domestic market.

Meanwhile, the US Dollar Index rose slightly by less than 0.1% to 99.8 points at 16:07 GMT, reaching a high of 100.1 and a low of 99.5.

As for copper trading, September futures contracts dropped sharply by 21.8% to $4.36 per pound at 16:06 GMT in US trading.

Bitcoin prices rose on Thursday morning, supported by gains in US stock futures, despite the Federal Reserve deciding to keep interest rates unchanged in its latest monetary policy meeting.

At the same time, a new report issued by the White House on digital assets raised fresh questions, as it offered few details regarding the long-promised “strategic Bitcoin reserve.”

The world’s most popular cryptocurrency rose by 1% over the past 24 hours, maintaining levels above $118,000 (£89,026). Investor sentiment also improved in broader markets, with futures for the Dow Jones, S&P 500, and Nasdaq indices rising by 0.29%, 0.9%, and 1.31% respectively in pre-market trading.

As for alternative cryptocurrencies (altcoins), performance was mixed following the Fed’s decision. Ethereum (ETH-USD) rose by 1.1%, while Solana declined by 0.4%.

The Fed holds rates and monitors tariff impact

During the Federal Open Market Committee (FOMC) meeting on Wednesday, the US central bank decided to keep the main interest rate within the 4.25% to 4.5% range. Fed Chair Jerome Powell adopted a cautious tone, stating that future decisions will depend on upcoming economic data — particularly as the effects of President Donald Trump’s newly imposed tariffs begin to show in the economy.

September rate cuts now less likely

Following Powell’s remarks, expectations for a rate cut in the September meeting dropped sharply. According to market data, the odds of a cut fell to just 40%, down from 63% before the announcement.

Powell noted that tariff increases have started to affect consumer prices for certain goods, but did not commit to any action in September. He said the Fed will monitor developments over the next two months.

Historically, rate cuts have been a positive factor for cryptocurrency markets, as they reduce the appeal of traditional savings and push investors toward riskier assets like Bitcoin and altcoins.

Criticism of Fed policy: “They’re chasing a phantom inflation”

However, not all market participants were convinced by the Fed’s stance. Louis Navellier, Chairman of Navellier & Associates, criticized the central bank’s approach in a note to investors: “The Fed says the economy is weak, but not weak enough to warrant a rate cut yet.” He added: “They claim the labor market is very strong, even though most of that strength is due to seasonal adjustments.”

Navellier pointed to ongoing deflationary pressures — including China’s economic slowdown, global weakness, and inventory buildup in anticipation of tariffs — saying: “The Fed is chasing a phantom inflation that doesn’t exist.”

Navellier praised Powell’s statement that any tariff-related inflation could be “a one-time event that will not repeat.” He added: “I’m glad he said that.”

Navellier called for aggressive rate cuts starting in September: “Frankly, the Fed should cut rates six times. It should start in September, cut again in December, and follow that with four more cuts next year. The rate should reach 3%.”

White House report on digital assets: Strategic Bitcoin reserve still unclear

In a notable development, the Trump administration on Wednesday issued its most comprehensive report yet on its digital asset policies. The report, published by the White House Digital Assets Working Group and spanning 163 pages, outlined the government’s evolving regulatory framework in this area, including banking infrastructure, anti-money laundering standards, and cross-border transactions.

However, despite high anticipation from the industry, the “strategic Bitcoin reserve” was mentioned only once in the report — without any substantive details about the nature or goals of the project.

Nevertheless, senior administration officials stated that the infrastructure for this reserve is under development, adding that more details will be announced soon.