The planned shutdown of Mozambique’s Mozal aluminum smelter is expected to weigh heavily on global aluminum supply next year, forcing European Union buyers to seek alternative sources, analysts say.
Mining group South32 confirmed that the Mozal smelter, with an annual capacity of 560000 metric tons, will be placed on care and maintenance from mid-March after negotiations with power utilities and the Mozambican government failed to secure a new electricity supply agreement.
Trade Data Monitor figures show that in the first 10 months of 2025, Mozal shipped nearly 430000 tons of aluminum to the EU, making Mozambique the bloc’s largest supplier of primary aluminum with close to one fifth of total imports.
ING now expects a global aluminum deficit of around 600000 tons in 2026, according to analyst Ewa Manthey. The bank had previously forecast a deficit of 200000 tons, following a shortfall of about half that size in 2025. Manthey said Europe is likely to compensate for the loss of Mozal supply through increased imports from Canada and the Middle East.
European demand for primary aluminum is estimated at about 9 million tons per year, according to industry group European Aluminium. The impact of Mozal’s shutdown is being compounded by reduced output at Century Aluminum’s Iceland smelter, where production has fallen by roughly two thirds following an electrical failure. Iceland has been the EU’s second-largest aluminum supplier this year.
Supply pressures are also being intensified by regulatory and trade factors. From January, the EU’s Carbon Border Adjustment Mechanism will impose a carbon tax on aluminum imports, while permitted imports of Russian aluminum will be capped at 50000 tons between February 26 and December 31.
Prices have responded accordingly. Three-month aluminum on the London Metal Exchange was trading about 0.5% higher at around $2880 per ton, close to the more than three-year high of $2920 recorded in early November and again in early December. The European duty-paid premium rose to a 10-month high of $340 per ton at the start of December and was last seen at $326.
According to consultancy CRU, a full closure of Mozal would turn its forecast of a roughly 200000-ton aluminum surplus in 2026 into a deficit. CRU’s head of aluminum raw materials, Ross Strachan, said producers in the Gulf region are well positioned to increase shipments to Europe, attracted by elevated premiums.
