AlCircle: Latest primaryaluminium news update

From bauxite diplomacy to aluminium's supply squeeze: How the global aluminium value chain is being reshaped

Fri, 19 Jun 2026 14:40:00 +0530

The aluminium industry's supply chain story increasingly begins long before metal reaches a smelter. Across several regions, governments and companies are moving to secure access to bauxite, the industry's most important raw material.

India's engagement with Venezuela reflects a broader effort to secure long-term access to raw materials essential for industrial growth. During recent discussions between the two countries, Venezuela's vast bauxite reserves emerged as a key area of interest, particularly the Los Pijiguaos region, which is estimated to hold billions of tonnes of the ore. The development highlights how resource security is becoming increasingly important as countries seek reliable supplies of materials that support aluminium production and manufacturing growth.

At the producer level, Guinea continues to reinforce its position as one of the world's most important bauxite suppliers. Ashapura Minechem's FY2026 performance highlighted the country's growing significance, with higher bauxite and iron ore shipments from Guinea helping drive a 91.2 per cent rise in revenue to INR 52.37 billion and a 44 per cent increase in profit.

Elsewhere, operational momentum is returning after weather and logistics disruptions. Metro Mining's Bauxite Hills operation in Queensland shipped 604,000 wet metric tonnes in May, up 45 per cent from April, following the return of its offshore floating terminal Ikamba from statutory dry-docking. Click here for the full story.

Meanwhile, Cameroon moved closer to joining the ranks of major exporting nations, with Canyon Resources targeting the first shipment from the Minim Martap project by late September 2026 once rail and port connections are completed.

While some regions focus on expanding supply, others are dealing with governance challenges. In the Solomon Islands, political scrutiny intensified around 33 bauxite shipments from West Rennell, bringing renewed attention to regulatory oversight and transparency in the sector. Click here.

As alumina production rises, environmental and geopolitical pressures build

The conversation then shifts downstream to alumina, where growth, sustainability and geopolitics are becoming increasingly intertwined.

China's alumina industry has expanded steadily over the past six years, with production rising from 71 million tonnes in 2020 to nearly 93-95 million tonnes in 2025. Yet this growth has also magnified another challenge: red mud generation. The increase in alumina output has been accompanied by a roughly 33 per cent rise in red mud volumes, drawing greater attention to ore beneficiation, refinery efficiency and waste utilisation. Red the full red mud story here.

Explore- Most comprehensive and forward-looking industry-focused report — Global Bauxite & Alumina Market Forecast to 2036: Supply–Demand, Trade Flows & Price Outlook

The issue is becoming more pronounced as China's dependence on imported bauxite continues to grow. According to the Bauxite Index, only 25 per cent of the country's alumina production in 2025 was derived from domestic bauxite, compared with more than 70 per cent before 2019. The quality of imported ore and the efficiency of refining processes are therefore becoming increasingly important factors in determining both production economics and waste generation.

At the same time, Europe is confronting its own alumina-related challenges. Estonia has renewed calls for a complete ban on alumina exports to Russia, arguing that the material continues to support sectors critical to the country's industrial and military capabilities.

The debate highlights how alumina has become part of broader geopolitical discussions surrounding sanctions and strategic supply chains. Against this backdrop, investment in advanced alumina applications continues. Sasol announced a EUR 60 million investment in its Brunsbüttel facility in Germany to expand production capacity for advanced materials and specialty chemicals, including spherical alumina supports used in catalyst systems.

Greenland Mines also strengthened its critical minerals strategy through an initial 9.9 per cent stake in AnorTech, with the option to increase ownership to 19.9 per cent over the next six months as it works to build a broader critical materials ecosystem. Read here.

Aluminium enters a period of tighter supply and policy intervention

The pressures building upstream are increasingly being felt in the aluminium market itself.

Supply disruptions linked to the Middle East conflict have tightened availability across the value chain. Concerns over smelter operations, shipping routes and regional energy supplies pushed London Metal Exchange aluminium prices to four-year highs and brought the market closer to the USD 4,000 per tonne mark. The rally has been amplified by China's 45 million tonne production cap, which limits the country's ability to rapidly increase output and compensate for any loss of supply from Gulf producers.

The impact of these supply concerns is now visible across regional markets. Japanese buyers have been offered a premium of USD 480 per tonne for July-September deliveries, around 36-37 per cent higher than levels agreed in the previous quarter, reinforcing the tightness seen in physical markets.

Governments are also paying closer attention to supply chain vulnerabilities. In the United States, Congresswoman Haley Stevens introduced the Secure Aluminium Supply Chains Act, which would require the US International Trade Commission to investigate aluminium scrap exports and assess their impact on domestic manufacturing. The proposal reflects growing concerns over the strategic importance of secondary aluminium and scrap availability.

For investors, the changing market environment has renewed interest in major producers. UBS recently highlighted supply risks associated with the Middle East conflict and stronger long-term demand from electrification and industrial sectors, bringing Alcoa's valuation back into focus. Read here.

India emerges at the centre of the next growth phase

While global markets grapple with supply constraints, India is increasingly positioning itself at the centre of aluminium's next phase of growth.

The country remains the world's second-largest primary aluminium producer and the third-largest consumer, supported by integrated producers including NALCO, Hindalco, Vedanta and BALCO. Combined primary smelting capacity stands at approximately 4.3 million tonnes, while annual consumption has reached 4.5-5 million tonnes. Read here.

Yet India's story is no longer solely about production. Despite concerns that US tariff measures would hurt exports, shipments of primary aluminium to the United States have continued to rise. Export value climbed 43.64 per cent year-on-year to USD 154.66 million during the first quarter of 2026, while cumulative exports reached USD 387 million in 2025 compared with USD 173.22 million a year earlier.

At the same time, domestic demand is accelerating rapidly. Consumption is projected to increase from 4.5 million tonnes to 8.3 million tonnes by 2030, prompting producers to commit more than INR 640 billion towards new mines, refineries and smelter expansions. The challenge is that demand may still outpace capacity additions, particularly as imports already approach 3 million tonnes annually and could account for nearly 55 per cent of requirements in FY2025-26.

The industry's future therefore hinges on whether planned investments can arrive quickly enough to support the country's ambitions of becoming both a major manufacturing hub and a leading aluminium consumer.

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A changing outlook for the second half of 2026

As the first half of 2026 draws to a close, the aluminium value chain finds itself at a turning point.

Bauxite supply is expanding in some regions while becoming increasingly strategic in others. Alumina producers are balancing growth with environmental and geopolitical pressures. Aluminium markets remain tight due to supply disruptions and production constraints, while governments are taking a more active role in protecting supply chains.

However, one of the biggest variables may be the Strait of Hormuz. Aluminium prices climbed nearly 29.1 per cent in the first half of the year, reaching USD 3,855 per tonne on June 2 as inventories tightened and supply concerns intensified. Now, following a preliminary agreement between the United States and Iran, the prospect of the waterway reopening could allow delayed raw material and metal cargoes to move more freely. Read here the full analysis.

If that happens, as much as 700,000 tonnes of aluminium could gradually return to the market, potentially easing some of the supply pressures that have dominated the industry for much of 2026. Whether that marks the beginning of a more balanced market or merely a pause in a longer period of tightness will shape the industry's next chapter.

Om Metallogic secures an INR 188 million aluminium alloy ingot supply contract

Fri, 19 Jun 2026 11:05:00 +0530

Om Metallogic Ltd. has recently secured a fresh supply contract valued at INR 18.81 CR (USD from Oswal Castings Pvt. Ltd. According to the agreement, Om Metallogic will deliver 476.35 tonnes of ADC-12 aluminium alloy ingots to the buyer, Oswal Castings, which adds a sizeable commercial order to the former’s account.

The company disclosure says the contract is awarded as an open work order. Revenue from the deal will not be recognised upfront but will progressively accrue as supplies are executed under a performance-linked billing arrangement.

Most importantly, Om Metallogic clarified that the transaction has been entered into on an arm’s-length basis and does not involve a related party. Such disclosures are closely watched by the investors as they provide reassurance that commercial agreements have been negotiated independently and in line with accepted corporate governance standards.

Although the order does not immediately translate into earnings, it actually strengthens the financial health and visibility of the firm. The financials, however, will depend on the capability of Om Metallogica to deliver the contracted quantity within the agreed schedule. After all, revenue recognition is directly linked to the fulfilment of supply obligations.

For forward-thinking aluminium market insights amidst supply chain and price challenges, read "ALuminium LeaderSpeak 2026"

As of now, investors will increasingly focus on execution over the coming quarters. But efficient contract management and timely delivery will determine how quickly the order contributes to the company's financial performance. Any disruption to production or delays in dispatch could postpone revenue recognition under the performance-based billing structure.

As far as the current scenario reveals, immediate focus will be on the pace of execution. Future corporate updates, delivery milestones, revenue recognition and orders’ contribution to financial performance will provide a clearer picture of its overall impact on Om Metallogic’s earnings trajectory.

LME aluminium price graph: Aluminium prices remain under pressure as inventories continue to decline

Fri, 19 Jun 2026 05:15:00 +0530

LME aluminium prices edged lower on June 18 compared with June 17, while warehouse stocks continued to fall. However, longer-dated contracts posted modest gains.

The LME cash bid price slipped to USD 3,401.50 per tonne on June 18 from USD 3,405 per tonne a day earlier, representing a decline of 0.10 per cent. The cash offer price also eased by 0.10 per cent to USD 3,402 per tonne from USD 3,405.50 per tonne.

Three-month aluminium prices also moved lower. The three-month bid fell from USD 3,408 per tonne to USD 3,400 per tonne, a decrease of 0.23 per cent. The three-month offer price declined by 0.26 per cent, dropping from USD 3,410 per tonne to USD 3,401 per tonne.

In contrast, December 2027 contracts recorded gains. The December 2027 bid rose from USD 3,178 per tonne to USD 3,190 per tonne, marking an increase of 0.38 per cent. The December 2027 offer price increased by 0.38 per cent from USD 3,183 per tonne to USD 3,195 per tonne.

Explore: The most comprehensive and forward-looking industry-focused report – Global Bauxite & Alumina Market Forecast to 2036: Supply–Demand, Trade Flows & Price Outlook

The Asian reference price weakened to USD 3,386.50 per tonne on June 18 from USD 3,410.50 per tonne on June 17, reflecting a decline of 0.70 per cent.

LME aluminium inventories continued their downward trend. Opening stocks fell by 1,475 tonnes, or 0.46 per cent, to 316,525 tonnes from 318,000 tonnes.

Live warrants remained unchanged at 247,600 tonnes.

Meanwhile, cancelled warrants decreased by 1,000 tonnes, or 1.45 per cent, to 67,925 tonnes from 68,925 tonnes.

The Alumina Platts price remained unchanged at USD 307.48 per tonne, recording a 0.00 per cent change from June 17 and indicating stability in the alumina market despite softer aluminium prices.

Explore our e-magazine ALuminium LeaderSpeak 2026 for the latest industry insights and trends.

Vedanta Aluminium shares rise as Citi and Kotak turn positive on stock

Fri, 19 Jun 2026 01:00:00 +0530

Vedanta Aluminium shares were in focus on Thursday after brokerage firms Citi and Kotak Institutional Equities initiated coverage on the stock with ‘Buy’ ratings.

The stock was trading 0.56 per cent higher at 9:40 am and had earlier risen as much as 2.93 per cent to INR 479 (USD 5.08) per share. Despite the gain, Vedanta Aluminium remains more than 10 per cent below its listing price of INR 522 (USD 5.53).

Vedanta Aluminium was listed on the stock exchanges on June 15 and was the only one of Vedanta’s four demerged businesses to debut at a premium.

Both Citi and Kotak highlighted favourable aluminium market fundamentals, planned capacity expansions and ongoing cost-reduction initiatives as key positives for the company. They also pointed to growing aluminium demand from sectors such as electric vehicles, renewable energy, data centres and copper substitution, while noting that global supply growth remains relatively limited.

For forward-thinking aluminium market insights amidst supply chain and price challenges, read "ALuminium LeaderSpeak 2026"

Citi initiated coverage with a Buy rating and a target price of INR 560 (USD 5.93). The brokerage said a positive outlook for aluminium prices, expansion-led growth, cost-efficiency measures and improving balance-sheet strength support its investment case.

Kotak Institutional Equities also started coverage with a Buy rating and assigned a fair value target of INR 600 (USD 6.36). The brokerage said Vedanta Aluminium is well positioned within India’s aluminium industry, supported by its scale of operations and planned expansion projects.

Century Aluminum shareholders elect seven directors, ratify auditor at 2026 annual meeting

Thu, 18 Jun 2026 11:25:00 +0530

Century Aluminum Company has reported the outcome of its 2026 Annual Meeting of Stockholders, with shareholders approving the election of seven board members, endorsing executive compensation, and ratifying Deloitte & Touche LLP as the company's independent auditor for fiscal year 2026.

According to a filing with the US Securities and Exchange Commission (SEC), 85.51 million shares, representing approximately 86.39 per cent of the company's outstanding shares, were present in person or represented by proxy at the meeting, constituting a quorum.

Shareholders elected Jarl Berntzen, Jennifer Bush, Jesse Gary, Errol Glasser, Wilhelm van Jaarsveld, Andrew Michelmore, and Tamla Olivier to serve one-year terms on the board until the company's 2027 Annual Meeting of Stockholders. The nominees received between 71.3 million and 79.9 million votes in favour, while broker non-votes totalled 5.38 million shares for each candidate.

The company's shareholders also ratified the appointment of Deloitte & Touche LLP as Century Aluminum's independent registered public accounting firm for the fiscal year ending 31 December 2026. The proposal received 84.37 million votes in favour, compared with 1.09 million votes against and 46,001 abstentions.

In a separate advisory, non-binding vote, shareholders approved the compensation of the company's named executive officers as outlined in the proxy statement. The proposal secured 79.59 million votes in favour, while 494,275 votes were cast against and 45,939 abstained. Broker non-votes for the proposal totalled 5.38 million shares.

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The annual meeting follows a period of strong financial performance for Century Aluminum. In the first quarter of 2026, the company reported adjusted earnings per share of USD 1.63, exceeding analysts' expectations of USD 1.56. Revenue came in at USD 649.2 million, ahead of the consensus estimate of USD 633.85 million.

The company's improving financial position was also reflected in a recent ratings action by S&P Global Ratings, which upgraded Century Aluminum's credit rating to 'B' from 'B-'. The agency cited stronger operating performance and improved leverage metrics, with the company's debt-to-EBITDA ratio declining to 2.6x at the end of fiscal 2025 from 3.4x a year earlier. S&P also noted the potential for record earnings and free operating cash flow generation over the next 12 months.

China June aluminium prices to remain capped by risk aversion, despite firm fundamentals

Thu, 18 Jun 2026 07:50:00 +0530

China aluminium prices trended lower through late May, with Mysteel regional A00 ingot averages retreating between 1.38 per cent and 1.45 per cent month-on-month. The market remained locked in a tug-of-war between macro headwinds and fundamental resilience.

While persistent rate hike expectations capped upside potential, continuous inventory destocking anchored the price floor, limiting the downside. Heading into June, prices are expected to remain under pressure from the prevailing macro backdrop; however, tightening supply-demand dynamics will likely contain the decline within a limited range.

Macro headwinds intensify

On the macro front, sentiment experienced a sharp shock. Mid-month, both US April inflation data and PPI significantly exceeded expectations, triggering a rapid cooling of market rate cut bets and a sudden surge in rate hike expectations. Rising US treasury yields fuelled concerns over liquidity tightening and suppressed risk appetite, emerging as the dominant macro bearish factor and weighing on aluminium prices.

In the LME market, supply shortage dominated overseas performance throughout the month. Production cuts in the Middle East led to sustained overseas inventory drawdowns, reinforcing supply tightening expectations, which drove LME aluminium to accelerate upward and continuously hit new highs. Domestically, fundamentals continued to send positive signals. Traders' aluminium inventories maintained a destocking trend. Downstream demand recovered steadily, and export performance showed growth.

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Output rises on capacity ramp-ups

According to Mysteel's full-sample survey of Chinese primary aluminium producers, China's preliminary primary aluminium production for May 2026 was 3.87 million tonnes, up 3.18 per cent year-on-year and 3.47 per cent month-on-month. The average daily output in May was 124,800 tonnes, up 300 tonnes month-on-month (based on 31 actual production days). Operating capacity edged higher during the month, with incremental output mainly from project ramp-ups and restarts in northern and northwestern regions, while production in other regions remained relatively stable.

The aluminium scrap market in May saw tight supply and prominent cost support. The average spread between primary aluminium and aluminium scrap in May 2026 was 1,224.62 yuan/tonne. On the supply side, the implementation of the "reverse invoicing" policy intensified significantly, with strict enforcement targeting issues such as insufficient identification documents and expired grace periods across multiple regions; some enterprises in Jiangxi and Anhui have successively paid back taxes. Coupled with the impending phase-out of local tax rebates, corporate compliance costs rose markedly, leading to production cuts or shutdowns in some areas and tightening the circulation of aluminium scrap.

On the demand side, inventory levels at downstream secondary aluminium enterprises declined, and restocking willingness remained relatively strong. However, given the overall weaker and volatile aluminium prices during the month, scrap suppliers generally preferred selling into strength and maintaining fast turnover, resulting in limited overall market circulation. A pricing game emerged between supplier selling rhythms and downstream restocking demand. Aluminium scrap prices remained range-bound between policy-driven cost support and the downward pressure from weaker aluminium prices, with limited short-term elasticity.

Downstream demand shows divergence

Domestic primary aluminium product processing overall extended its steady growth trend in May. Despite fluctuating and softer aluminium prices, production enthusiasm among processors remained relatively stable. According to Mysteel's statistics, the weekly average output of aluminium billets in May increased by 1.1 per cent month-on-month. Regarding inventories, plant inventories continued to draw down; as of the end of May, finished product inventories of aluminium billets fell 15.2 per cent month-on-month.

Downstream, performance varied across segments. For aluminium bar, output dipped slightly due to insufficient molten aluminium supply in some regions, while fluctuating futures prices kept downstream enterprises cautious, leading to sluggish spot transactions.

For aluminium rod, export demand for wire rods was robust, common rod supply turned tight, and many producers restricted order acceptance or halted new orders entirely, driving a month-on-month output increase. Aluminium plate and strip capacity utilization rates remained high, with ample orders for can lids, power battery casing plates, and new energy vehicle body panels.

In the aluminium foil sector, energy storage and power battery demand provided sustained support; leading enterprises' order books are scheduled through August–September, resulting in a slight output increase. From the perspective of end-use demand structure, divergence across segments persisted. In construction, new real estate starts remained depressed, traditional peak-season demand lacked elasticity, and operating rates stayed low year-on-year.

The automotive and lightweighting sectors maintained steady growth, with the rising penetration rate of new energy vehicles driving a steady increase in aluminium usage per vehicle. Energy storage and power grid sectors continued to lead demand growth, with strong consumption of battery foil and aluminium rod.

Export-wise, demand for aluminium materials and products surged, and the return of overseas orders effectively boosted the processing sector, marking the most prominent demand highlight in May. Overall, weaker aluminium prices partially alleviated procurement cost pressures for end-users, providing marginal support for demand release.

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Market enters destocking cycle

May marked a key turning point for China's domestic aluminium market fundamentals, as the accumulation cycle ended completely and inventories officially entered a trending destocking channel.

As of May 29, according to Mysteel's statistics, total traders' inventories of aluminium in China stood at 1.401 million tonnes, down 48,000 tonnes month-on-month, with the drawdown rate slightly faster than in April. In terms of supply structure, the proportion of directly supplied molten aluminium continued to rise, reaching 74.18 per cent in May (up 0.39 percentage points month-on-month), effectively diverting the availability of physical aluminium ingots and marginally easing casting pressure. The smelters' in-plant inventories decreased by 9,000 tonnes to 59,000 tonnes, alleviating inventory pressure.

On the demand side, both domestic and external demand jointly accelerated inventory drawdowns. Domestic demand saw the continuation of downstream processing and end-user recovery, with sustained release of rigid procurement needs; external demand benefited from strong exports of aluminium semis and finished products, with returning overseas orders lifting processor operating rates and further driving raw material consumption.

Traders' inventories of aluminium bar fell by 68,000 tonnes to 190,000 tonnes, a significant decline that directly reflected substantial warming in downstream processing demand. The drawdown of inventory signalled improving supply-demand dynamics, and the logic supporting the aluminium price floor via fundamentals continued to strengthen.

By the end of May 2026, SHFE aluminium ingot warehouse receipts had accumulated to 485,500 tonnes, up 36,000 tonnes from the end of April. This modest build was primarily driven by inflows related to arbitrage and delivery activities; the receipts were concentrated in delivery warehouses and did not enter the spot market, thus exerting limited disruption on the spot destocking pace.

Based on Mysteel's analysis of May primary aluminium supply, demand, and changes in traders' and smelters' in-plant inventories of aluminium ingots and bars, the theoretical supply gap for the month is estimated at approximately 156,000 tons.

Prices to remain range-bound in June

Entering June, the dynamic of strengthening fundamental support offset by persistent macro pressures will keep aluminium prices oscillating overall. However, the continuous improvement in fundamentals provides notable support for the price floor, limiting downside room.

On the macro front, rate hike expectations remain the dominant constraint. Persistently strong US inflation data continues to push back the timing of the Federal Reserve's policy pivot, and elevated Treasury yields continue to suppress non-ferrous metal valuations.

On the supply side, the pace of new domestic capacity additions remains manageable, with stable increments from southwestern China. Overseas, uncertainty surrounds the recovery of smelting capacity in the Middle East, compounded by disruptions related to navigation through the Strait of Hormuz; the global aluminium supply tightness is unlikely to change fundamentally in the near term, providing ongoing price support.

On the demand side, resilience in new energy-related demand remains intact, supported by accelerating grid investment, continued expansion of energy storage installations, and sustained export chain prosperity, ensuring solid structural demand support.

Regarding inventories, the destocking trend is expected to strengthen further in June, making the logic of inventory-driven price floor support increasingly clear; even if macro pressures intensify periodically, a sharp price collapse remains unlikely. Overall, aluminium prices in June will reflect a two-way game between macro headwinds and fundamental tailwinds, resulting in an overall oscillating trajectory.

Note: This news is published under a content and exchange agreement with Mysteel

With Hormuz reopening and possibility of 700,000t of aluminium flowing into the market, here's the price outlook for H2 2026

Thu, 18 Jun 2026 09:05:00 +0530

Primary aluminium prices climbed to four-year highs in H1 2026 as the market grappled with tightening inventories and mounting concerns over supply disruptions linked to the conflict in the Middle East. The year began with the LME Aluminium Cash Price below USD 3000 per tonne and, over the next five months, rose by approximately 29.1 per cent to reach USD 3,855 per tonne on June 2. As tensions escalated, the Strait of Hormuz-one of the world's most important shipping routes faced significant restrictions, slowing the movement of cargoes across global supply chains. Delays in shipments and uncertainty over future deliveries heightened concerns among consumers and traders, who increasingly turned their attention to available inventories.

This was reflected in inventory levels. LME Aluminium Stocks started the year at around 509,275 tonnes and gradually moved lower as H1 2026 progressed. After remaining above 400,000 tonnes in the early months of the year, stocks declined through March, April and May before reaching 319,500 tonnes by mid-June.

The lack of significant new stock inflows, coupled with concerns over future supply availability, kept aluminium prices elevated during the period.

However, now the market narrative is changing after the US and Iran signed a preliminary agreement aimed at ending the Gulf conflict. Delayed cargoes and raw material shipments may begin moving more freely, potentially easing supply concerns.

The change in sentiment was immediately visible in prices, with the LME aluminium cash price falling below USD 3,500 per tonne on 15 June 2026, the day the agreement was announced, and continuing to weaken as confidence in future supply availability improved. Explore- Most comprehensive and forward-looking industry-focused report — Global Bauxite & Alumina Market Forecast to 2036: Supply–Demand, Trade Flows & Price Outlook

How different was the market from last year?

The shift from 2025 to H1 2026 was substantial.

In 2025, aluminium prices were considerably lower than those recorded in H1 2026. Compared with H2 2025, the highest LME aluminium cash price rose by 29.9 per cent from USD 2,968 per tonne to USD 3,855 per tonne, while the lowest increased by 17.3 per cent from USD 2,545 per tonne to USD 2,986 per tonne. The contrast was even more pronounced against H1 2025, with the highest cash price up 40.8 per cent from USD 2,737 per tonne and the lowest up 30.7 per cent from USD 2,285 per tonne.

A similar trend was observed in the LME Aluminium 3-Month Price. Compared with H2 2025, the highest 3-Month Price increased by 25.5 per cent from USD 2,990 per tonne to USD 3,752.5 per tonne, while the lowest rose by 18.2 per cent from USD 2,547 per tonne to USD 3,010.5 per tonne. Against H1 2025, the highest 3-Month Price was up 37.9 per cent from USD 2,721 per tonne, while the lowest increased by 29.4 per cent from USD 2,327 per tonne.

What do inventories reveal about underlying market conditions?

LME aluminium inventories also recorded a sustained decline throughout H1 2026. Month-end stocks fell from 495,725 tonnes in January to 465,550 tonnes in February (-6.1 per cent), before declining further to 416,775 tonnes in March (-10.5 per cent), 367,050 tonnes in April (-11.9 per cent), and 338,000 tonnes in May (-7.9 per cent).

The downward trend continued into June, with inventories reaching 319,500 tonnes by June 15, representing a further 5.5 per cent decline from end-May levels and on June 17, inventories stood at 316,525 tonnes .

The decline becomes even more significant when viewed against previous periods. In 2025, inventory levels were consistently higher than those seen in H1 2026. Compared with H2 2025, the highest LME aluminium stock level declined by 8.7 per cent from 558,050 tonnes to 509,275 tonnes, while the lowest inventory level fell by 8.4 per cent from 348,625 tonnes to 319,500 tonnes.

The gap was even wider against H1 2025, when the highest stock level stood at 634,650 tonnes, 19.8 per cent above the H1 2026 peak, while the lowest inventory level was 336,900 tonnes, 5.2 per cent higher than the H1 2026 low.

The persistent decline in stocks suggests that aluminium demand remained firm throughout the period, while supply availability remained constrained, which led to LME aluminium prices reaching four-year highs during the first half of 2026.

What caused the sharp rise in aluminium prices?

.Hormuz disruption tightened supply chains

The aluminium market's performance in H1 2026 was shaped largely by the geopolitical crisis in the Middle East, which disrupted one of the industry's most important trade routes. The closure of the Strait of Hormuz created an immediate supply shock, raising concerns over the movement of aluminium, alumina and bauxite across global supply chains. As uncertainty over material availability increased, buyers rushed to secure supplies while traders built a significant geopolitical risk premium into aluminium prices.

The region's importance to the global aluminium industry made the disruption particularly impactful. The Middle East accounts for around 9 per cent of global primary aluminium production, while Gulf Cooperation Council (GCC) countries produced approximately 6.159 million tonnes of primary aluminium in 2025, representing about 8.35 per cent of global supply. More than 5 million tonnes of aluminium pass through the Strait of Hormuz each year, making it a vital link between producers in the Gulf and consumers across Asia, Europe and North America. It supplies 19 per cent of EU primary aluminum imports, 20 per cent -21 per cent of US imports, and 28 per cent of Japan imports.

So, if we estimate the volume of aluminium that could have been available for export during the period, it can be assessed using GCC production and export trends. GCC aluminium production declined from around 500,000 tonnes in January to 330,000 tonnes in April, representing a 34 per cent reduction. The month-on-month decline between March and April was approximately 29 per cent; applying a similar trend suggests that May production may have been around 300,000 tonnes.Based on these estimates, total GCC aluminium production for the March-May period would be close to 1 million tonnes.

Given that GCC producers typically export around 70 per cent of their output, the region's potential export volume over the three months is estimated at approximately 700,000 tonnes which was potentially stuck due to Hormuz closure .

The vulnerability extended beyond finished metal shipments. Approximately 75 per cent of Gulf smelters depend on alumina and bauxite cargoes transiting through Hormuz, while nearly 20 per cent of US aluminium imports originate from the Gulf region. Consequently, the disruption affected both exports and raw material supplies, tightening market availability and contributing to the rise in aluminium prices during H1 2026. Explore- Most comprehensive and forward-looking industry-focused report — Global Bauxite & Alumina Market Forecast to 2036: Supply–Demand, Trade Flows & Price Outlook

.Energy and logistics costs added pressure

The supply concerns were compounded by a sharp increase in production and transportation costs.

Aluminium is often described as "solid electricity" because producing one tonne of primary metal requires approximately 13,000–18,000 kWh of electricity, making energy the industry's largest cost component. Electricity typically accounts for around 30-40 per cent of total production costs, meaning fluctuations in energy markets are quickly reflected in aluminium prices.

During 2026, European gas prices reportedly increased by around 50 per cent, rising from approximately EUR 30/MWh to EUR 46/MWh. This pushed electricity costs for aluminium producers from around USD 600–900 per tonne to approximately USD 1,470–1,764 per tonne, increasing total production costs by an estimated 45–55 per cent, from roughly USD 2,250 per tonne to around USD 3,117 per tonne.

With smelters consuming approximately 14,000–15,000 kWh per tonne of aluminium produced, even relatively modest increases in power prices had a significant impact on operating costs.

At the same time, logistics became more expensive. War-risk insurance premiums for vessels crossing the Gulf increased from roughly 1 per cent to between 3.5 per cent and 10 per cent of vessel value per voyage, while some insurers raised premiums substantially or withdrew coverage altogether.

To avoid the region, many vessels diverted around the Cape of Good Hope, adding 7–9 days to transit times and extending journeys by 20–30 per cent. The longer route increased fuel consumption, with additional fuel costs for large tankers exceeding USD 300,000 per trip, while higher freight rates added further pressure to aluminium supply chains.

.China's production cap limits supply growth

Beyond the geopolitical disruptions in the Middle East, the aluminium market was already facing structural supply constraints. China, which accounts for around 60 per cent of global aluminium production, plays a critical role in balancing global supply and demand. However, the country's aluminium industry continues to operate under a 45-million-tonne annual production cap introduced in 2017 to curb overcapacity and reduce environmental pressures.

While the cap has helped prevent excessive production growth, it has also limited the market's ability to respond quickly to supply disruptions elsewhere.

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Reopening agreement triggers market reassessment

Market sentiment shifted rapidly following the announcement of the preliminary agreement. On 15 June 2026, the LME aluminium cash price fell to USD 3,359 per tonne, its lowest closing level since 27 March 2026.

The market reaction was logical. Producers such as Alba in Bahrain and EGA in the UAE had already experienced operational disruptions following infrastructure damage and interruptions to alumina supply chains, while port closures and force majeure declarations had reduced refined metal availability. Those factors had helped drive aluminium to a four-year high.

The prospect of shipping routes reopening and supply chains gradually normalising prompted traders to reassess risk premiums that had been built into aluminium prices.

Additional supply expectations have also emerged from Indonesia. Several Indonesian producers are seeking LME brand registration, while new smelting projects continue to ramp up production. These developments are expected to increase deliverable metal availability over time, although their impact on near-term supply conditions is likely to remain limited.

Outlook

Following the Hormuz agreement, expectations of aluminium prices exceeding USD 4,000 per tonne have become less likely. Instead, prices are increasingly expected to remain within a range of approximately USD 3,000-3,600 per tonne in H2 2026. Explore a comprehensive and forward-looking industry-focused report — Global Bauxite & Alumina Market Forecast to 2036: Supply–Demand, Trade Flows & Price Outlook

Recent trading patterns also indicate improving market sentiment. Since June 15, the LME Aluminium 3-Month Price has moved above the LME Aluminium Cash Price, shifting the market from backwardation into contango.

The key question now is no longer whether supply disruptions will intensify, but whether the reopening of the Strait of Hormuz can restore enough supply confidence to prevent another sharp rally in aluminium prices.

Note: This is exclusive coverage by AL Circle and may not be reproduced, republished or shared without prior permission.

Destocking logic continues to materialise, macro pressure caps aluminium price upside

Thu, 18 Jun 2026 07:00:00 +0530

Futures: The most-traded SHFE aluminium contract opened at RMB 23,900 per tonne in the night session on June 17, with the highest price at RMB 23,950 per tonne, the lowest at RMB 23,860 per tonne, and finally closed at RMB 23,940 per tonne, up 0.25 per cent from the prior close.

During this period, prices rebounded from lows to repair and formed a small bullish candlestick, under pressure near the 5-period moving average at 23,920.11, while still trading below all medium and long-term moving averages—MA10 (23,968.82), MA20 (24,065.18), MA40 (24,212.87), and MA60 (24,308.99)—all of which maintained a bearish downward alignment.

The previous low of 23,725 offered effective support, and short-term downward momentum continued to slow. Trading volume reached 35,900 lots, shrinking from the previous session, while open interest stood at 216,000 lots, down by 3,364 lots, as the futures continued to show bearish position-reduction characteristics.

From a technical perspective, in the 4-hour MACD indicator, the DIFF (-124.37) remained below the DEA (-116.59), maintaining a death cross structure, and the green bar STICK reading was -15.56. Bearish momentum visibly contracted versus earlier, but the bear-dominated pattern remained intact. LME aluminium opened at USD 3,391 per tonne on June 17, with the highest price at USD 3,433 per tonne, the lowest at USD 3,389 per tonne, and finally closed at USD 3,424.5 per tonne, up 0.99 per cent from the prior close.

On the day, prices rebounded mildly from lows after a sharp decline, under pressure below the 5-period moving average at 3,436.06, while also trading below all medium and long-term moving averages—MA10 (3,492.56), MA20 (3,545.17), MA40 (3,546.55), and MA60 (3,508.55)—with all these moving averages overall maintaining a bearish downward alignment. The prior low of 3,334.0 provided temporary support, and short-term downward momentum eased somewhat.

Trading volume totalled 20,993 lots, sharply shrinking from the prior session, while open interest was 617,000 lots, down by 17,153 lots, reflecting bearish position reduction on the futures. Technically, in the daily MACD indicator, the DIFF (-38.57) stayed below the DEA (-5.57), keeping a death cross structure, and the green bar STICK reading was -65.99. Bearish momentum contracted slightly versus earlier, though the bear-dominated pattern remained unchanged.

Macro front: The US Fed’s monetary policy meeting this week, as widely expected, kept rates on hold. The post-meeting statement underscored its commitment to price stability in bringing down elevated inflation, while the dot plot reflected a strongly hawkish tilt among policymakers. On Wednesday, June 17, Eastern Time, the Fed announced after its FOMC meeting that it would maintain the target range for the federal funds rate unchanged at 3.50 per cent to 3.75 per cent. Following three consecutive rate cuts through year-end last year, the FOMC has now held rates steady at all four monetary policy meetings so far in 2026.

Fundamentals: Against the backdrop of India's supply gap yet to be filled, uncertainties in Middle East transport, and domestic expansion projects being a distant solution to an immediate need, China's export window for can stock to India is expected to remain open through 2026.

However, it must be clearly recognised that the driving force behind this round of export expansion mainly comes from supply-side disruptions and policy exemptions, rather than a proactive shift in India's procurement demand from China, lacking a foundation for long-term cooperation.

Combined with multiple constraints such as policy risks from the sunset review, unfavourable economics of finished can transportation, and the gradual recovery of India's domestic supply capacity, future incremental room and sustainability of China's can stock exports to India still face considerable uncertainty.

Inventory side, as of Thursday, aluminium ingot inventory in major domestic consumption areas stood at 1.255 million tonnes, destocking 35,000 tonnes from Monday this week and 57,000 tonnes from last Thursday.

Primary aluminium market: In early trading, the SHFE aluminium 2606 contract fluctuated upward, with the centre of its trading range above the same period yesterday. However, with aluminium prices holding near recent lows, buying sentiment remained relatively active, driving sellers' quotes and transaction prices to continue strengthening. Yesterday, affected by the rise in aluminium prices, some sellers' selling sentiment edged up from the previous day.

The mainstream spot transaction price was at a discount of RMB 60-80 per tonne against the SHFE aluminium 2607 contract. In east China, the sell-side sentiment index was 2.91 yesterday, up 0.08 from the previous day; the buy-side sentiment index was 3.06, flat.

As futures prices held at the low for the month, traders holding cargo in central China yesterday showed strong sentiment to hold prices firm and hold back from selling, tending to quickly narrow premiums to profit from price spreads. However, downstream processing enterprises showed low willingness to purchase at high prices, leading to a tug-of-war between holding prices firm and pushing for lower prices, and premiums trended lower.

Ultimately, the actual transaction price range in the central China market was at a discount of RMB 100-130 per tonne against the SHFE aluminium 2607 contract. In central China yesterday, the sell-side sentiment index was 2.92, up 0.01 from the previous day; the buy-side sentiment index was 2.21, down 0.01.

Aluminium scrap: Yesterday, the SMM A00 price rose RMB 60 per tonne from the previous trading day to RMB 23,860 per tonne, while the aluminium scrap market saw mixed changes. As corporate tax costs increased by over 2 per cent compared to the same period last year, the price difference between A00 aluminium and aluminium scrap narrowed, strengthening the floor support for aluminium scrap prices.

Supply side, regulatory oversight of the "reverse invoicing" policy continued to tighten, with tax rebates cancelled in some provinces and tax audits strengthened, leading to higher costs for invoiced raw materials. Production cuts and shutdowns further spread among enterprises in Anhui, Jiangxi, Hubei, and other regions.

Currently, high compliance costs in the raw material recycling sector kept available invoiced supply tight, and the scarcity of invoices became a core support for aluminium scrap prices. Moreover, the price spread between Chinese and overseas markets stay inverted, and scarce low-cost, high-quality imports have further weakened the supplement to the domestic market. Demand side, the off-season effect continues to deepen. Downstream scrap utilisation enterprises operate at low operating rates, end-use order follow-through is sluggish, and enterprises maintain a strategy of purchasing as needed and low inventory, with a cautious purchasing atmosphere.

Downstream die-casting enterprises' orders remain sluggish, procurement is mainly based on rigid demand and small batches, and there is insufficient willingness to chase rising prices, keeping market transaction activity persistently low. End-use consumption is unlikely to see substantial improvement, and the demand side continues to suppress the upside room for prices. Aluminium scrap market prices are expected to continue to fluctuate at highs in a weak pattern, but downside room is limited.

The tightness of compliant invoice-bearing supply persists, and invoice scarcity provides bottom support for aluminium scrap prices. The lagged contraction effect of imported aluminium scrap has not yet fully materialised, and subsequent port arrivals will run at low levels. Meanwhile, against the backdrop of the deepening off-season, the sustainability of orders for downstream scrap utilisation enterprises is worrisome.

Enterprises maintain a strategy of purchasing as needed and low inventory, and the purchasing atmosphere is unlikely to see significant improvement, resulting in an overall pattern of weak supply and demand.

Secondary aluminium alloy: Spot market: Yesterday, the ADC12 market was generally stable. SMM ADC12 quoted price yesterday held steady at RMB 24,100 per tonne. Based on feedback, tight tax invoices and tight supply of aluminium scrap raw materials remain the core supporting factors in the current market. Against the backdrop of continuous advancement in reverse invoicing and compliance supervision, enterprises' procurement costs and tax burdens stay high, significantly limiting the downside room for prices.

Some enterprises still have the need to repair profits and pass on costs. Demand side, market performance was relatively mediocre. Demand in the automotive industry chain remained weak, pre-holiday stockpiling sentiment was insufficient, and the release of new orders was limited. Only orders from motorcycles and some sub-sectors performed moderately.

Currently, no obvious supply shortage has appeared, and supply and demand as a whole maintain a weak balance. Short-term prices are expected to mainly fluctuate at highs, with tight tax invoices and scrap supply providing bottom support. Future focus should be on the demand recovery in H2 and the continued impact of tax invoice constraints on the supply side. If demand recovers after the peak season arrives while supply release is restricted, market prices may still have further upside room.

Aluminium market summary: Macro front, the easing of Middle East geopolitics has caused aluminium's geopolitical risk premium to subside. The US Fed kept interest rates unchanged, and the dot plot released hawkish signals. Coupled with high US inflation, interest rate hike expectations continue to weigh on aluminium price valuations. Fundamentals side, the previous Middle East conflict had caused continuous passive production cuts in overseas aluminium capacity, with a long repair cycle for damaged capacity. The expectation of a widening global annual supply deficit remains, and combined with rising energy cost expectations, this provides strong bottom support for LME aluminium. In China, the destocking trend has been established, and the destocking logic is continuously being realised.

The rebound in the proportion of liquid aluminium, support from export demand, and the reduction in aluminium ingot formation volume driven by supply normalisation—three fundamental factors jointly drive the continuation of destocking. SMM maintains its judgment that inventory will drop to around 1.28 million tonnes by late June, and it is expected to further approach 1.2 million tonnes by late June to early July, bringing some support to aluminium prices.

However, the pressure from high domestic inventory remains relatively evident, and coupled with the current bearish macro sentiment dominating the market, short-term domestic aluminium prices are mainly fluctuating and adjusting.

Note: This article has been issued by SMM and has been published by AL Circle with its original information without any modifications or edits to the core subject/data.

LME aluminium price recovers to $3,405.5/t as the inventory continues to decline

Thu, 18 Jun 2026 05:13:00 +0530

The London Metal Exchange (LME) aluminium price graph recovered at the close of the June 17 session. The upswing in cash and near-term contracts improved in parallel as the withdrawals from stocks led to a continued decline in the aluminium inventory.

The LME aluminium cash bid as well as offer prices reported an improvement of 1.38 per cent day-on-day on June 17 from June 16. As the bid rose to USD 3,405 per tonne from USD 3,358.5 per tonne, the offer price climbed to USD 3,405.5 per tonne from USD 3,359 per tonne.

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The LME aluminium three-month contract followed a similar trend. The bid price edged up to USD 3,408 per tonne from USD 3,388.5 per tonne, recording a gain of 0.58 per cent. Meanwhile, the offer price rose from USD 3,389.5 per tonne to USD 3,410 per tonne, gaining 0.6 per cent.

In the longer-dated contracts, both the December 2027 bid and offer prices decreased by 0.78 per cent at the close of June 17. The bid price slipped to USD 3,178 per tonne from USD 3,203 per tonne, while the offer price dropped to USD 3,183 per tonne from USD 3,208 per tonne.

The LME aluminium three-month Asian Reference Price stood at USD 3,410.5 per tonne on June 17, indicating a notable gain of 0.65 per cent compared to USD 3,388.5 per tonne on June 16.

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On the inventory front, LME aluminium opening stock fell to 318,000 tonnes on June 17 compared to 319,500 tonnes on June 16, reflecting a decline of 0.47 per cent.

Live warrants remained unchanged at 247,600 tonnes.

However, cancelled warrants dipped to 68,925 tonnes from 70,400 tonnes, marking a 2.1 per cent difference.

LME alumina Platts price settled at USD 307.48 per tonne on June 17, rising from USD 305.57 per tonne on the previous close by 0.63 per cent.

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Join this FREE webinar to discover how autonomous furnace tending is transforming aluminium cast houses

Wed, 17 Jun 2026 11:10:00 +0530

Globally, the aluminium cast houses continue to face challenges like safety incidents, inconsistent metal quality, labour shortage and rising operating costs. Because of these challenges, producers are now racing to modernise their operations and in this, autonomous furnace tending is deemed to be rising as the most practical technology. Via this technology, producers will be able to improve safety, enhance productivity and have greater metal yield, all without compromising operational efficiency.

However, in this scenario, the main question is not about whether automation will become part of aluminium casting operations, but about whether your organisation will adopt it before the competition gains the advantage.

Owing to that, AL Circle with the Sales Director at RIA Cast House Engineering, Mark Bumford, is hosting a free webinar, “Autonomous furnace tending in aluminium cast houses: Improving safety, productivity and yield”.

The main objective behind the webinar is to reveal how automation and intelligent furnace tending solutions are helping aluminium producers create safer workplaces while delivering measurable operational improvements.

Webinar details

Duration: 1 hour
Mode: Online
Time: 1:30 PM UK time | 6:00 PM IST | 8:30 AM Eastern Time
Date: 7 July 2026

Why should you attend this webinar?

Autonomous furnace tending is emerging as a practical solution to numerous challenges like rising energy costs, labour shortages, tighter production schedules and growing expectations around operational efficiency.

By reducing manual intervention around molten metal, improving process consistency and enabling continuous monitoring, automation is helping aluminium producers create safer workplaces while increasing productivity and improving metal yield.

As more facilities begin adopting Industry 4.0 technologies, understanding how autonomous furnace tending fits into existing operations is becoming essential and not optional.

This webinar will help attendees understand:

How autonomous furnace tending improves operator safety in aluminium cast houses
Practical ways automation increases furnace productivity and process efficiency
Techniques for improving aluminium yield while reducing metal losses
The operational impact of robotics and intelligent furnace management
Real-world implementation challenges and lessons from industry experts
What aluminium producers should consider before investing in cast house automation

Who should attend this webinar?

This webinar is especially valuable for:

Cast house managers
Plant managers
Production heads
Operations managers
Process engineers
Foundry professionals
Aluminium manufacturers
Recycling companies
Automation & digital transformation teams
Health & safety professionals
Maintenance engineers
Technology decision-makers across the AL value chain

Join the webinar, “Autonomous furnace tending in aluminium cast houses: Improving safety, productivity and yield”, to engage in live conversations, which are designed specifically for all professionals in the aluminium cast house. From this webinar, hear expert insights and discussion about the latest breakthroughs in autonomous furnace tending.

Additionally, this webinar will aid in understanding how automation is not only boosting workplace safety but also enhancing operational efficiency and maximising metal yield in today’s aluminium cast houses.

Best of all, there’s no registration fee, making it a perfect opportunity for anyone in the aluminium industry to keep up with cutting-edge technologies and best practices. Don’t miss out!