1. Tight Global Mineral Supply Pushes Up Raw Material Costs
Copper mine output in Chile has been cut, the commissioning of large copper mines in Indonesia has been postponed, and mines in Peru have imposed production limits, resulting in shrinking global copper ore supply.
China’s refined copper imports fell year-on-year in Q2 2026; copper prices surged nearly 50% within the year, with spot prices breaking through 100,000 yuan per ton.
Geopolitical tensions in the Middle East plus production cuts of electrolytic aluminum in Europe have led to continuous inventory drawdowns of international aluminum ingots, pushing aluminum prices steadily higher.
Rising raw material prices force downstream foundries to adjust their product mix.
The industrial shift from copper to aluminum in power equipment is speeding up.
Aluminum alloy cables and aluminum transformers account for 65%~70% of newly built small and medium charging stations.
Copper castings for transformers and power distribution cabinets are gradually being replaced by high-strength aluminum castings, effectively cutting downstream manufacturing costs.
2. Launch of Recycled Aluminum Futures Improves the Pricing Mechanism for Casting Raw Materials
The futures and options of cast aluminum alloy (recycled aluminum) were officially launched on the Shanghai Futures Exchange, offering hedging tools for manufacturers of recycled aluminum castings.
China’s annual production capacity of recycled casting aluminum stands at 13 million tons, with an annual output of 6.2 million tons.
Thanks to their low cost and low-carbon features, recycled copper and aluminum castings are gaining wider market penetration under the "Dual Carbon" goals and the EU carbon tariff policy.
