Aluminum's New Global Dance: Navigating Trade Shifts for Strategic Gains

The global aluminum market is undergoing a seismic realignment, driven by China’s evolving trade dynamics and the interplay of tariffs, demand shifts, and geopolitical maneuvering. Declining imports and surging exports—particularly to ASEAN—signal a critical inflection point for investors. Amid this turbulence, opportunities abound for those positioned to capitalize on tariff de-escalation, ASEAN’s infrastructure boom, and the enduring strength of China’s aluminum export machine.

The Decline of U.S. Influence: How Tariffs Are Redirecting Trade

China’s aluminum imports from the U.S. have plummeted to a mere 9% of total exports since 2022, with volumes stabilizing at 600,000 tons annually—down from 18% of exports in 2022. This decline is no accident. U.S. tariffs, which spiked to 25% in early 2025 before being temporarily reduced to 10% in May, have forced Chinese producers to pivot toward markets with lower barriers. The result? A historic shift toward ASEAN, where Vietnam now leads as China’s top export market, with imports surging 37% year-on-year to 920,000 tons in 2024.

Meanwhile, the U.S. has paid a steep price. The 2025 tariff regime, combined with retaliatory measures from China, reduced U.S. GDP growth by 0.7 percentage points and cost households an average of $2,800 in higher consumer prices. This pain creates political pressure for de-escalation—a potential tailwind for aluminum prices if tariffs are rolled back.

ASEAN: The Engine of Export Growth

The real story lies in ASEAN’s meteoric rise as China’s preferred trade partner. Thailand, for instance, now supplies 24.7% of China’s aluminum scrap imports after a staggering 103.4% year-on-year surge in early 2025. Vietnam and Indonesia, meanwhile, are absorbing high-value products like solar mounting systems and EV battery enclosures—items that command premium prices and require minimal tariff exposure.

Chinese firms are doubling down on this trend. Both companies have invested billions in Southeast Asian smelters to bypass U.S. tariffs, achieving 15% lower production costs than domestic rivals. This strategic move isn’t just about cost efficiency—it’s about locking in long-term supply chains to serve ASEAN’s booming construction and EV industries.

The Tariff De-Escalation Window: A Catalyst for Price Rebound?

The U.S.-China trade relationship remains unpredictable, but the temporary reduction of U.S. tariffs to 10% in May 2025 hints at a potential thaw. If talks advance further—particularly on aluminum and other key sectors—the $3.4 billion in potential WTO compensations for China could reignite arbitrage opportunities.

For investors, this creates a compelling “wait-and-see” play. A resolution of trade tensions would likely boost aluminum prices, as U.S. demand rebounds and Chinese exporters regain access to higher-margin markets. Even if tariffs remain elevated, ASEAN’s infrastructure boom—from Indonesia’s smelters to Thailand’s EV factories—ensures steady demand.

Investment Recommendations: Positioning for the New Trade Order

1. Chinese Aluminum Producers with Overseas Assets:
2. China Hongqiao Group (01383.HK): Its $6.3 billion Indonesian smelter project positions it to dominate ASEAN’s solar and EV supply chains.

3. Xinfa Group (000902.SZ): Malaysia’s tariff-free access and growing EV sector make its 800,000-ton facility a cornerstone of regional growth.

4. ASEAN Infrastructure Plays:

5. Thai Smelter Developers: Thailand’s scrap imports and EV demand make it a key hub for aluminum processing.

6. Malaysian REITs: Logistics facilities near ports in Penang or Johor Bahru will benefit from rising trade volumes.

7. EU Scrap Suppliers:

8. Monitor the EU’s potential aluminum scrap export tax. If imposed, EU-based recyclers like Euro Recycling (EURC.L) could see demand diverted to non-tariff markets, boosting prices.

Conclusion: The Time to Act Is Now

The aluminum market is at a crossroads. While geopolitical risks linger, the structural shifts in trade, production, and demand are undeniable. ASEAN’s rise, China’s overseas expansion, and the latent potential of tariff de-escalation create a trifecta of opportunities. Investors who act swiftly—allocating to Chinese exporters and regional infrastructure—will position themselves to profit from this new global order.

The window for arbitrage and growth is opening. Don’t miss it.