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Driven by unprecedented profits and a global supply deficit, China's daily aluminum production hit a record 129,000 tons in April. Total output reached 15.33 million tons for the first four months, near Beijing's 45-million-ton annual capacity ceiling.

This extreme expansion caused domestic inventories to more than double to a six-year high of 1.37 million tons, sparking overproduction anxieties amid weak domestic demand.

On the other hand, Citi anticipates further price increases, predicting the biggest supply shock in 50 years. Global supply faces severe strain as the Strait of Hormuz crisis drove up energy costs, forcing European aluminum smelters to cut output, which also makes China the world's main source of aluminum supply.

Though Chinese domestic real estate demand slumped, expanding green technology, power grids, and battery storage sectors now support Chinese aluminum consumption.