In the second quarter of 2025, aluminium ingot prices continued to slide. According to recent data from PriceWatch, the average price fell by 2.69%, reaching $2,717 per metric ton (FOB Shanghai). While this might seem like a small drop, it’s part of a larger trend of softening prices that’s been playing out for a while now.
So, what’s behind this recent decline? And what could it mean for the rest of the year?
Let’s break it down in simple terms.
Aluminium: A Metal We Rely On Every Day
Before diving into the numbers, it’s worth remembering why aluminium is such an important material.
Aluminium is everywhere — in cars, airplanes, power lines, packaging, construction, electronics, and more. It’s lightweight, strong, corrosion-resistant, and recyclable, which makes it a top choice for manufacturers.
Aluminium ingots are the basic form in which aluminium is sold and transported. These large metal blocks are melted down and shaped into final products. So, when ingot prices move up or down, it directly impacts industries around the world.
What Happened in Q2 2025?
In Q2 2025, aluminium ingot prices fell to $2,717 per metric ton, down from Q1 levels. That’s a 2.69% decrease.
This drop wasn’t entirely unexpected. Prices have been under pressure for a few quarters now, mostly due to a mix of weaker demand, trade uncertainty, and rising inventories.
Here are the main reasons for the decline:
1. Sluggish Demand from EV and Construction Sectors
Two of the biggest industries that use aluminium — electric vehicles (EVs) and construction have been underperforming lately.
🚗 Electric Vehicles
A few years ago, EVs were expected to drive major growth in aluminium demand. Automakers were turning to aluminium to make cars lighter and more energy-efficient. But in 2025, EV sales have been slower than expected.
Higher battery prices, limited charging infrastructure in some regions, and cautious consumer spending have all contributed to the slowdown. As a result, aluminium producers aren’t seeing the kind of large-volume orders they were hoping for from the auto sector.
🏗️ Construction
The construction industry is also facing headwinds. Rising interest rates, tighter credit conditions, and reduced real estate investment in several countries have slowed down new building projects. Since aluminium is widely used in things like window frames, siding, and roofing, less construction activity means lower demand for aluminium.
For latest updates, price queries, demand forecasts, and supplier information related to aluminium ingot prices, submit your request here: https://www.price-watch.ai/contact/
2. Global Trade Tensions Are Affecting Exports
Another factor weighing down the aluminium market is uncertainty in international trade, particularly related to U.S. import policies.
🌐 Section 232 Tariffs
The United States has continued its Section 232 tariffs on aluminium imports, originally introduced to protect domestic production. These tariffs make it harder for foreign producers — especially in China — to sell aluminium into the U.S. market.
This has reduced export opportunities for many suppliers and left them with more unsold inventory, which in turn contributes to falling prices. It’s not just about the U.S., either — these kinds of policies create ripple effects across global trade flows, making the whole market more cautious.
3. Inventory is Building Up
With demand slower and exports more limited, producers are storing more aluminium than they’re shipping out. When inventory levels rise and demand doesn’t keep pace, prices usually start to slide.
This is exactly what’s happening now. There’s plenty of aluminium available, but not enough strong buying interest to push prices higher. So, prices have softened as producers try to keep sales moving.
Impact on Producers
This price trend is putting pressure on aluminium producers.
They still have to deal with high costs — like energy, raw materials, labor, and transportation — but they’re earning less per ton of metal sold. For companies with higher operating costs, this can create serious financial strain.
If the price weakness continues, some producers may have to cut back production, delay expansion plans, or restructure their operations to stay competitive.
Impact on Buyers
For buyers — such as carmakers, electronics manufacturers, and construction companies — lower aluminium prices can actually be good news. Cheaper raw materials can help reduce production costs and potentially increase profit margins.
However, not all buyers are rushing to take advantage of lower prices. Many are still being cautious, waiting to see whether prices drop further or stabilize. In uncertain markets, even low prices don’t always lead to more buying.
What’s Next for Aluminium Prices?
So, will aluminium prices keep falling, or could we see a rebound?
It depends on several factors:
✅ Demand Recovery
If EV sales pick up or if governments invest in new infrastructure projects, demand for aluminium could rise again, supporting prices.
✅ Trade Policy Changes
Any changes to global trade policies — especially a softening of U.S. tariffs could boost international trade and improve the export outlook for major aluminium producers.
✅ Supply Adjustments
If producers start slowing down output to prevent oversupply, this could help balance the market and put a floor under prices.
As of now, the market is still very cautious. Everyone is watching closely to see what the second half of 2025 will bring.
Final Thoughts: A Market at a Crossroads
The 2.69% decline in aluminium ingot prices in Q2 2025 reflects a broader story slower demand, limited exports, and growing stockpiles. It’s a challenging environment for producers, especially those who rely heavily on international sales.
That said, aluminium is still one of the world’s most important industrial metals. While prices are soft right now, the long-term demand outlook particularly from green energy, EVs, and infrastructure remains strong.
For now, the market is in a wait-and-see phase. If demand improves and trade issues ease, prices could recover. But if current conditions continue, producers may need to adjust to a “new normal” of tighter margins and cautious buying behavior.
