The surprising market calm over the last few days rests on a growing confidence that the loss of Gulf metal, even if protracted, can be offset by higher exports from China and Indonesia.
China's aluminium smelters are enjoying strong profit margins thanks to the combination of low alumina and high metal prices. Capacity utilisation is sitting close to 99%, according to consultancy AZ Global.
Exports of semi-manufactured aluminium products such as bars, rods and tubes rose by 10% year-on-year in the first five months of 2026, according to the World Bureau of Metal Statistics (WBMS), which collects official customs data. Shipments of 595,000 tons in May were the highest monthly count since November 2024.
While China's product exports are not a like-for-like replacement for lost primary and alloy production from the Gulf, they can help rebalance the market by suppressing Western demand.
The downside is that China's exports compete with similar semi-products capacity in the West, which has already pushed back with multiple trade protection measures.
Then there is Indonesia.
The country is rapidly emerging as a major supplier of primary aluminium thanks to a Chinese investment boom in new smelters.
The 480,000-ton-per-year Hua Chin smelter, a joint venture between Tsingshan Holding Group and Huafon Group, ramped up last year and in May applied to register its "HCAI" brand with the LME.
Another new entrant, Alamtri Resources Indonesia, is commissioning a similar-sized plant and shipped its first exports in June.
The project pipeline stretches to as many as 11 new smelters with combined annual production capacity of 13 million tons, according to Greg Wittbecker, president of Wittsend Commodity Advisors.
Indonesia's exports of primary metal jumped from 155,000 tons in 2024 to 511,000 tons in 2025 and rose by another 58% year-on-year in the first five months of this year, according to the WBMS.
You can start to see why the aluminium market has become a lot more relaxed about the hit to Gulf production.
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