Mozambique’s Mozal smelter, with a capacity of 560,000 metric tons per year, will be placed on care and maintenance from mid-March, after negotiations with utilities and the government failed to secure a new power deal. The plant shipped nearly 430,000 tons of aluminum to the European Union in the first ten months of 2025, making Mozambique the bloc’s largest primary aluminum supplier, accounting for almost a fifth of total imports.

Analysts now forecast a global aluminum deficit of around 600,000 tons in 2026, up from a previous estimate of 200,000 tons, following a smaller deficit in 2025. Europe is expected to offset the Mozal shortfall mainly through increased imports from Canada and the Middle East.

The shutdown coincides with reduced output at Century Aluminum’s Iceland smelter and the EU’s carbon border adjustment mechanism, which has raised prices. CRU analysts said a full Mozal closure would turn a forecast surplus into a deficit, with Middle East exporters likely filling the gap.