LONDON - A smelter shutdown in Mozambique is set to dent global aluminium supplies next year, analysts say, leaving the plant's core European Union customers searching for alternatives.

South32 confirmed on Tuesday that the 560 000 metric ton per year capacity Mozal smelter would be placed on care and maintenance from mid-March, after talks with utilities and Mozambique's government failed to yield a new power deal.

The plant shipped almost 430 000 tons of aluminium to the EU in the first 10 months of 2025, figures from Trade Data Monitor show, making Mozambique the top supplier of primary metal to the bloc with nearly a fifth of the region's total imports.

"We are expecting a deficit of around 600 000 tons now for next year," ING analyst Ewa Manthey said in an email. ING had previously seen a 200 000-ton deficit in the global aluminium market, after a deficit half that size in 2025.

"Europe is likely to fill the Mozal gap mainly via higher imports from Canada and the Middle East," Manthey added.

Europe's demand for primary aluminium is around 9-million tons per year, Brussels-based industry group European Aluminium estimates.

Mozal's impending closure coincides with an outage at Century Aluminum's smelter in Iceland, which has slashed output by two-thirds due to electrical failure. Iceland has been the EU's second-biggest aluminium supplier this year.

The EU's new Carbon Border Adjustment Mechanism, which will put a carbon tax on aluminium imports from January, has also pushed up prices, while Russian metal allowed to enter the EU will be cut to 50 000 tons from February 26 to December 31.

Benchmark three-month aluminium CMAL3 on the London Metal Exchange was trading up 0.5% at around $2 880 at 16:02 GMT, not far off the more than three-year high of $2,920 hit on November 3 and again on December 5.

The European aluminium duty-paid premium EPDc1, which buyers pay on top of the LME price for physical metal to cover taxes, freight and handling costs, hit a 10-month high of $340 a ton at the start of December and was last at $326.

A complete closure of Mozal would flip CRU's forecast of a roughly 200,000-ton aluminium surplus next year into a deficit, said Ross Strachan, its head of aluminium raw materials, who sees the Mideast Gulf making up the missing volumes.

"There are key exporters in the region that are likely to send greater shipments into Europe as they're attracted by the higher premiums," Strachan said.