AlCircle: Latest primaryaluminium news update

Vedanta Aluminium opens post-demerger chapter with 205% profit surge and record 632 KT output

Mon, 03 Aug 2026 07:46:00 +0530

Vedanta Aluminium Metal Limited has opened its first full reporting chapter as an independent listed aluminium producer with record production and sharply higher earnings. For the quarter ended June 30, 2026 (Q1 FY27), the company reported profit after tax (PAT) of INR 65.97 billion, up 205 per cent year-on-year and 33 per cent sequentially, alongside its highest-ever quarterly aluminium production.

The numbers put both scale and profitability at the centre of Vedanta Aluminium’s post-demerger story. Revenue climbed 45 per cent year-on-year and 13 per cent quarter-on-quarter, supported by higher volumes and improved realisations.

EBITDA more than doubled from the year-ago period, surging 134 per cent. Compared with Q4 FY26, EBITDA increased 24 per cent. The company’s EBITDA margin consequently expanded to a record 50 per cent.

The results come shortly after Vedanta Aluminium Metal Limited began trading independently following the restructuring of Vedanta Limited, giving investors direct exposure to the group’s aluminium business.

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Production records add operational weight to the earnings jump

The financial performance was accompanied by new production highs across the aluminium portfolio.

Vedanta Aluminium produced 632,000 tonnes of aluminium during Q1 FY27, its highest quarterly output to date. This compares with around 605,000 tonnes in Q1 FY26, representing year-on-year growth of approximately 5 per cent.

More importantly for the company’s downstream and margin strategy, value-added product (VAP) production reached a record 389,000 tonnes during the quarter.

That means value-added products accounted for roughly 62 per cent of quarterly aluminium production, based on the reported production figures. The growing contribution of VAPs is significant because these products generally serve more specialised applications across industries such as automotive, electrical, renewable energy, infrastructure, packaging and advanced manufacturing.

The upstream side of Vedanta Aluminium’s integrated chain also expanded considerably.

Alumina production increased 41 per cent year-on-year to 826,000 tonnes in Q1 FY27, backed by expanded refining capacity and improved asset utilisation. Higher captive alumina availability is particularly relevant for an integrated aluminium producer because alumina represents a critical raw-material input for primary aluminium smelting.

The combination of higher alumina production, record metal output and rising value-added production therefore indicates that the company’s Q1 performance was not confined to stronger aluminium prices or realisations alone; operational volumes also moved higher.

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The quarter also unfolded against a supportive aluminium pricing environment. Reuters reported that elevated aluminium prices contributed to the sharp improvement in Vedanta Aluminium’s quarterly earnings.

The company itself attributed its record revenue to the combination of higher volumes and improved realisations.

Balance sheet strengthens as leverage drops to 0.9x

The quarter was not only about production and earnings.

Vedanta Aluminium’s Net Debt-to-EBITDA ratio improved to 0.9x, compared with 1.3x in the previous quarter, giving the newly independent company a stronger balance-sheet position as it pursues its next phase of expansion.

Credit rating agencies CRISIL and ICRA have also upgraded the company’s credit rating to AA+ with a Stable outlook.

The improvement follows the broader restructuring of Vedanta’s businesses. The demerger became effective on May 1, 2026, creating independent sector-focused entities spanning aluminium, power, oil & gas and iron & steel alongside the residual Vedanta Limited business.

Eligible Vedanta shareholders received one equity share of Vedanta Aluminium Metal Limited for every Vedanta share held on the record date. The aluminium company subsequently began independent trading in June.

The restructuring was designed to provide each business with greater operational and strategic independence, while allowing investors to assess the individual businesses separately rather than through Vedanta’s previous conglomerate structure.

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Vedanta Aluminium declares INR 8 per share interim dividend

Alongside the Q1 results, Vedanta Aluminium’s Board approved the company’s first interim dividend of INR 8 per equity share.

According to the company, this takes the cumulative dividend payout for the quarter to more than INR 30 billion.

The payout arrives unusually early in Vedanta Aluminium’s life as an independently listed company and coincides with the sharp improvement in profitability and leverage recorded during the quarter.

Rajesh Kumar, Whole-Time Director & CEO of Vedanta Aluminium Metal Limited, said, “Our first quarter as an independent company reflects disciplined execution, operational resilience and a clear long-term strategy. Our focus on resource security, integrated operations and value-added products continues to strengthen our competitive position and support sustainable growth.”

Chief Financial Officer Anup Agarwal added, “We begin this new phase with record financial performance, a stronger balance sheet and an improved credit profile. These provide a solid foundation to pursue growth opportunities and meet rising global demand for aluminium across energy transition, infrastructure, transportation, packaging and advanced manufacturing.”

Why the 389 KT VAP figure deserves attention

For the aluminium industry, perhaps one of the more strategically important numbers within Vedanta Aluminium’s Q1 performance is the record of value-added product output.

Primary aluminium producers globally are increasingly looking beyond commodity metal volumes towards differentiated products capable of addressing specific requirements in automotive lightweighting, electrical applications, renewable-energy infrastructure, packaging and other advanced manufacturing sectors.

Vedanta Aluminium’s VAP production during Q1 FY27 was equivalent to about 61.6 per cent of its total aluminium output for the quarter. Maintaining and expanding this mix could become increasingly important as the company attempts to capture more value from every tonne of metal produced rather than relying solely on primary aluminium price movements.

At the same time, the 41 per cent rise in alumina output provides another piece of the integration equation. Greater internal alumina availability can strengthen raw-material security as the company scales aluminium production, although future margins will continue to be influenced by aluminium prices, raw-material and energy costs, operating performance and broader market conditions.

A strong first test for the standalone aluminium business

Vedanta Aluminium’s first quarterly scorecard following the demerger has therefore delivered several records simultaneously: INR 211.05 billion in revenue, INR 104.99 billion in EBITDA, INR 65.97 billion in PAT, record aluminium production and 389,000 tonnes of value-added product output.

For the global aluminium market, the operational numbers may ultimately matter as much as the earnings headline.

The company serves customers across more than 60 countries and operates an integrated aluminium and alumina portfolio. Its ability to increase alumina availability, raise primary metal production and move a larger proportion of that metal towards value-added applications will determine how effectively the newly independent company converts its scale into longer-term competitiveness.

Q1 FY27 has provided Vedanta Aluminium with a record-heavy start. The next question is whether the company can sustain that momentum as its standalone strategy moves from its first quarter into a full financial year.

NALCO Q1 revenue climbs 39% as higher aluminium prices lift PAT to ₹20.02b

Mon, 03 Aug 2026 09:15:00 +0530

National Aluminium Company Limited (NALCO) reported a sharp increase in revenue and profit for the quarter ended June 30, 2026, driven by higher aluminium prices and improved operational efficiency. The state-owned aluminium producer also recommended a final dividend of INR 1 (USD 0.011) per equity share for FY26, taking the total dividend for the year to INR 11.50 (USD 0.12) per share.

On a standalone basis, revenue from operations rose 39.28 per cent year-on-year to INR 53 billion (USD 557 million) from INR 38 billion (USD 400 million), while total income increased 39.30 per cent to INR 54.8 billion (USD 575 million). Profit before tax climbed to INR 26.45 billion (USD 278 million) from INR 14.3 billion (USD 150 million) in the corresponding quarter last year, while profit after tax nearly doubled to INR 20 billion (USD 210 million) from INR 10.6 billion (USD 111 million). Earnings per share increased to INR 5.34 (USD 0.056) from INR 3.60 (USD 0.038).

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Aluminium business drives quarterly earnings

NALCO's aluminium segment remained the primary contributor to quarterly performance, generating revenue of INR 41.5 billion (USD 436 million) and a segment result of INR 26 billion (USD 273 million). The chemicals business reported revenue of INR 15.7 billion (USD 165 million) with a segment result of INR 2.7 billion.

The company also reported strong consolidated results, with revenue from operations rising 39.30 per cent year-on-year to INR 53 billion and total income increasing 39.35 per cent to INR 5,476 crore (USD 557 million). Consolidated profit before tax stood at INR 26.5 billion (USD 278 million).

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Final dividend takes FY26 payout to INR 11.50 per share

NALCO's board recommended a final dividend of INR 1 (USD 0.011) per equity share, representing 20 per cent of the INR 5 face value, subject to shareholder approval at the company's 45th Annual General Meeting scheduled for August 31.

The proposed payout is in addition to three interim dividends totalling INR 10.50 (USD 0.011) per share already paid during FY26, taking the total dividend for the financial year to INR 11.50 (USD 0.12) per share, or 230 per cent of the face value. The record date for the final dividend has been fixed as August 24.

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Joint ventures, captive power project and other developments

The board approved the appointment of M/s Tanmaya S. Pradhan & Co. and M/s S Dhal & Co. as cost auditors for FY27.

NALCO said revenue from its two wind power plants in Rajasthan has not been recognised since April 1, 2019, due to the absence of a renewed power purchase agreement, with the matter currently pending before the Rajasthan High Court.

The company also provided updates on its joint ventures, which include Angul Aluminium Park, GACL-NALCO Alkalies & Chemicals, Khanij Bidesh India, and Utkarsha Aluminium Dhatu Nigam Limited. NALCO confirmed that it has received approval from the Ministry of Mines to wind up Utkarsha Aluminium Dhatu Nigam Limited because of commercial unviability. Separately, the company has entered into a 50:50 joint venture with NLC India Limited to develop a 1,080 MW captive thermal power plant at Angul, Odisha.

LME aluminium reverses previous gains as alumina Platts rises 2.55%, inventories continue to fall

Mon, 03 Aug 2026 05:15:00 +0530

London Metal Exchange (LME) aluminium prices moved lower on July 31 after recording gains in the previous session. Both cash and forward aluminium contracts declined, while warehouse inventories continued to fall. In contrast, the LME alumina Platts price increased.

The LME aluminium cash bid price fell 1.05 per cent to USD 3,195 per tonne from USD 3,229 per tonne on July 30, while the cash offer price declined 1.08 per cent to USD 3,196 per tonne from USD 3,231 per tonne.

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The three-month aluminium bid price also edged down 0.20 per cent to USD 3,178.5 per tonne from USD 3,185 per tonne. The offer price also edged down by 0.25 per cent, moving from USD 3,187 per tonne to USD 3,179 per tonne.

On the longer-dated contracts, both the Dec-27 bid and offer prices declined by around 0.32 per cent from the previous session. The bid settled at USD 3,108 per tonne, down from USD 3,118 per tonne, while the offer eased to USD 3,113 per tonne from USD 3,123 per tonne.

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The LME aluminium Asian reference price stood at USD 3,184 per tonne on July 31, down 0.36 per cent from USD 3,195.5 per tonne on July 30.

LME aluminium inventories continued to decline as of July 31. Opening stocks decreased 0.56 per cent to 266,300 tonnes from 267,800 tonnes.

Live warrants remained unchanged at 245,250 tonnes, while cancelled warrants fell 9.03 per cent to 19,150 tonnes from 21,050 tonnes.

Meanwhile, the LME alumina Platts price rose 2.55 per cent to USD 346 per tonne from USD 337.38 per tonne in the previous session.

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PBOC releases easing signals, aluminium price upside room limited amid supply-demand and geopolitical game

Mon, 03 Aug 2026 05:00:00 +0530

Futures: The most-traded SHFE aluminium 2609 contract closed at RMB 23,665 per tonne, unchanged from the previous day's settlement price, with a change of 0.00 per cent. The intraday opening was RMB 23,600 per tonne, and it fluctuated within a range of RMB 23,550-23,695 per tonne. The price traded above MA5 (23,519.00), MA10 (23,371.00), and MA30 (23,142.83), but below MA60 (23,787.83). The medium and long-term moving averages as a whole maintained a bearish alignment and continued to press downward. A consolidative repair structure at low levels emerged, with the 60-day moving average above acting as a key resistance. On the MACD indicator, the DIF (19.3006) stood above the DEA (-78.0446), and the MACD histogram bar value was 194.6903. Bearish momentum continued to weaken, while bullish repair momentum persisted. The suggested reference trading range for SHFE aluminium is RMB 23,400-24,000 per tonne. The LME aluminium 3M contract settled at USD 3,189.00 per tonne, down 0.19 per cent. The price traded above MA5 (3,180.40), MA10 (3,178.40), and MA30 (3,157.92), but below MA60 (3,366.95). The medium and long-term moving averages showed a bearish alignment and gradually pressed downward. Overall, a consolidative repair structure at low levels appeared, with the 60-day moving average above forming significant resistance. On the MACD indicator, the DIF (-24.4334) stood above the DEA (-39.6437), and the MACD histogram bar was 30.4207. Bearish momentum continued to fade, and the downward momentum slowed further. The suggested reference trading range for LME aluminium is USD 3,100-3,250 per tonne.

Macro front: The escalating US-Iran tensions took a dramatic reversal after a sharp rise. US President Trump stated that Iran and other Middle Eastern countries had requested a halt to attacks, and based on this request, he agreed to cancel military strikes. Trump said an agreement had been reached on the Strait of Hormuz, and denuclearization would also be agreed upon, with negotiations with Iran starting on Monday afternoon (Tuesday morning Beijing time). An Iranian military official called Trump's claim that Iran requested to stop attacks a "new lie." Iranian sources said the plan to reopen the Strait of Hormuz was purely a rumour. Iranian Foreign Minister Araghchi said that Iran and Oman held productive discussions on common principles and operational mechanisms for managing safe navigation in the Strait of Hormuz, with talks now in the final stage and nearing completion. Iranian Foreign Ministry spokesperson Baghaei stated that the Strait of Hormuz would never return to its pre-war state, and the current negotiations between Iran and Oman on the waterway are unrelated to the opening or closing of the strait. The People's Bank of China held its 2026 H2 work conference. The meeting emphasised the need to implement appropriately accommodative monetary policy, fully leverage the effectiveness of existing policies, promptly plan and introduce practical and effective incremental policies, step up counter-cyclical adjustments, redouble efforts to expand domestic demand and optimise supply, and solidly carry out key tasks in the second half of the year to promote sustained, improved, and higher-quality economic development.

Fundamentals: In overseas markets, production resumptions and new capacity of aluminium outside China continued to ramp up as planned. Expectations of a shift from tight to loose in the global aluminium market over the longer term persisted, continuously limiting the upside room for aluminium prices. However, the US-Iran conflict continued to escalate, and shipping disruptions in the Strait of Hormuz extended. The market feared that regional inflows of aluminium raw materials and outflows of finished aluminium products would be hindered. Coupled with rising crude oil, which pushed up overseas smelting energy costs, the regional geopolitical risk premium remained elevated. Supply uncertainty persisted, providing some bottom support for aluminium prices in the short term. On the domestic front, on the supply side, the proportion of liquid aluminium in China kept rising. On the inventory side, the social inventory of aluminium in China built up by 5,000 tonnes from last Thursday to 958,000 tonnes, and destocked by 21,000 tonnes from last Monday, with the destocking speed of aluminium ingot slowing down. In terms of exports, the SHFE/LME price ratio continued to recover last week. As of July 30, the ratio had rebounded to 7.4, up 13.8 per cent from the previous low of 6.5. Import losses narrowed to around RMB 3,300 per tonne, down more than 45 per cent from the previous peak loss of RMB 7,604 per tonne.

Primary aluminium market: In early trading, the SHFE aluminium 2608 contract moved near yesterday's price centre. Downstream players feared high aluminium prices, but as it was Friday, there was some just-in-time procurement. Additionally, with inventory destocking continuing, some suppliers were unwilling to sell at lower prices, but overall transaction prices shifted lower. Today, spot premiums for SHFE aluminium were mainly transacted between RMB 8-20 per tonne and flat against the August contract. Today, the east China selling sentiment index was 3.09, down 0.04 D-o-D; the buying sentiment index was 2.84, down 0.04 D-o-D. After three consecutive days of gains in SHFE aluminium futures, and coinciding with the Friday stockpiling cycle, downstream processing enterprises in the central China market significantly reduced their willingness to stockpile. They mainly focused on just-in-time procurement and digesting inventories, with only a few firms considering stockpiling. Traders mostly took advantage of low premiums to purchase, but overall market transactions remained sluggish. The actual transaction prices in the central China market were eventually centred around discounts of RMB 160-180 per tonne against the SHFE aluminium August contract. Today, the central China selling sentiment index was 3.20, up 0.02 D-o-D; the buying sentiment index was 2.83, up 0.03 D-o-D. Today, the futures market stopped rising and edged lower, while the south China spot market remained weak. Absolute prices stayed at high levels. Although the spot-futures spread was expected to weaken, it also remained high. With the weekend approaching and month-end, suppliers briefly held prices firm but then stepped up selling due to the desire to cash in at high levels. Mainstream quotes were at discounts of RMB 30-10 per tonne, showing varying degrees of decline, and discounted cargo was abundant. On the demand side, downstream fear of high prices remained, and procurement was weak. Traders pushed for lower prices and purchased minimal amounts, showing no flexibility beyond fulfilling orders. The oversupply pattern persisted, and overall transactions were rather moderate. Spot transaction prices were concentrated at premiums of RMB 85-125 per tonne over the SHFE aluminium 2608 contract.

Secondary aluminium raw materials: Today, SMM A00 spot aluminium prices closed at RMB 23,630 per tonne, flat MoM from the previous trading day, with aluminium scrap prices generally stable across all regions. Regarding the price spread between primary and scrap, on July 33, the price difference between A00 aluminium and mixed aluminium extrusion scrap free of paint in Foshan stood at around RMB 2,070 per tonne, while the price difference between A00 aluminium and shredded aluminium tense scrap was approximately RMB 860 per tonne. Amid the traditional off-season for consumption, scrap suppliers' willingness to sell at lower prices was generally low, keeping aluminium scrap prices largely firm. On the demand side, with the arrival of high-temperature holidays, operating rates at downstream cast aluminium alloy enterprises declined, and orders shrank; while operating rates at secondary aluminium plate/sheet and strip enterprises remained moderate, overall raw material demand clearly weakened compared to Q2. In the short term, the tight supply of compliant, invoiced cargo persists, and suppliers' reluctance to sell at lower prices provides bottom support for prices. On the import front, the lagged effects of the UAE's export ban and the EU's tariff surcharge policy are expected to materialise gradually in the upcoming months, with port arrivals staying low from June to August. On the demand side, the sluggish downstream orders are unlikely to improve in the short term. Scrap utilisation enterprises are very likely to continue purchasing as needed and maintain low inventory strategies, making a significant improvement in purchasing sentiment difficult.

Secondary aluminium alloy: Spot Market: Today, ADC12 market offers were largely stable. The cost side has yet to show notable changes, still providing some support to prices. However, demand-side performance remains weak, and insufficient orders are exerting certain pressure on the market, with some enterprises showing a slight willingness to cut prices. Under the dual influence of cost support and weak demand, prices lack sufficient upward momentum for further increases in the short term and the market is consolidating at highs. Future price direction will still depend on primary aluminium price trends and the recovery of downstream orders.

Overall outlook: The macro front improved recently, with expectations for US Fed interest rate hikes’ marginal constraint on the nonferrous metals sector continuing to ease. The proportion of liquid aluminium in China kept rising, and the domestic central bank will implement a loose monetary policy, strengthen counter-cyclical adjustments, and boost efforts to expand domestic demand, promoting sustained, positive, and broad-based economic development. Persistent geopolitical risk premiums in the Middle East jointly underpinned aluminium price operations, significantly bolstering market confidence in the short term. However, factors including the ongoing release of overseas aluminium capacity in the long term, recently weak traditional end-use demand in China, coupled with fluctuating expectations for US Fed interest rate hikes and uncertainties from Middle East geopolitical disturbances, still exert certain pressure on the upside room for aluminium prices.

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.

Why does a barrel of oil matter to aluminium producers? A hidden link between petroleum coke, prebaked anode and the metal itself

Mon, 03 Aug 2026 03:30:00 +0530

Oil price shocks are traditionally associated with their impact on transportation, aviation, paints and chemicals, tyres, rubber, and fertiliser industries, while the ripple effects on metallurgy often remain overlooked. The recent Middle East geopolitical crisis has renewed attention on aluminium’s strategic importance as a critical global metal supplier, but what about the impact of the oil price surge linked to the conflict on aluminium’s cost structure?

Indeed, the aluminium industry does not consume crude oil directly in the smelting process. Still, it does through petroleum coke and carbon anodes used in the smelting process, which creates a significant connection between global oil markets and aluminium production costs.

Between crude oil and aluminium – the petroleum coke connection

Green petroleum coke, also called raw petroleum coke, is produced as a byproduct during the delayed coking process in oil refineries. It is further processed at high temperatures of around 1,200°C to 1,300°C to produce calcined petroleum coke (CPC), a key raw material for manufacturing carbon anodes.

These carbon anodes are essential in the electrolytic reduction process that converts alumina into primary aluminium.

For producing 1 short tonne of petroleum coke, 5 barrels of heavy crude oil are required. On a weight basis, typical medium crude oil yields about 8 per cent of its mass as petroleum coke, while heavier crudes (such as those from Venezuela or oil sands) can yield 15 per cent to 20 per cent or more.

Since petroleum coke is a byproduct of oil refining, pet coke prices are directly related to the costs of crude oil. The higher the prices of crude oil more are the margins of refinery, and therefore, the increased prices of pet coke, which further ripples down to anode costs, given that calcined petroleum coke is the primary raw material of carbon anodes, accounting for 60 to 75 per cent of anode composition. So, if CPC price increases by USD 50 per tonne, an anode plant consuming 0.7 tonnes CPC per tonne of anode sees a USD 35 per tonne cost increase in anode production.

The image used in this article is generated with an AI tool

The final consequence is the increased aluminium smelting cost. On average, anode cost typically contributes 10 to 15 per cent of the total cost of primary aluminium production, albeit the exact share varies depending on energy prices, alumina costs, sourcing strategy, and smelter technology.

One tonne of primary aluminium production requires 400-450 kg of carbon anodes. So, going by the average prebaked carbon anode price between USD 700 per tonne and USD 900 per tonne, its cost contribution comes to USD 294-378 per tonne.

At present, the crude oil price is close to USD 84-90 per barrel. So, if 5 barrels of oil are required to produce 1 tonne of petroleum coke, then the cost would be around USD 420-450 per tonne.

To know the production, demand and consumption forecasts on bauxite and alumina, explore the report "Global Bauxite & Alumina Market Forecast to 2036: Supply–Demand, Trade Flows & Price Outlook"

Why the Middle East crisis matters to aluminium producers?

One of the key reasons is the strong position of the Middle East as a global aluminium producer, accounting for about 10 per cent of the global output. Another no less important reason is the region’s crude oil exports, making developments in the region highly influential for global energy markets.

The renewed military escalation in the Middle East since early July 2026 has pushed up global oil prices, ranging between USD 84-90 per barrel. On Wednesday, July 29, oil prices climbed about 7 per cent. Suvro Sarkar, head of energy ‌research at DBS Bank, estimates Brent oil prices to grow up to USD 100 per barrel in the near term as the geopolitical conflict ebbs and flows in the Middle East.

According to a Reuters update, only a small number of commodity ships could transit the Strait of Hormuz last week. Five transited on Wednesday and 39 on Tuesday through the Bal el-Mandab, an alternative route for Saudi oil shipments to Asia. Speaking of Asia, the region is the highest destination of the Middle East’s oil exports, led by China, India, and Japan.

China’s petroleum coke and anode markets feel the pressure

China, as one of the world’s largest aluminium producers, provides a clear example of how energy market disruptions can flow into aluminium raw material markets.

As a ripple effect of oil price surge and uncertainty around the Middle Eastern supply routes, China, as one of the leading oil importers from the Middle East, has experienced increased pet coke and prebaked anode prices. Although this is one part of the story, reduced availability of certain grades, especially low-sulphur pet coke required for aluminium anode production, and changes in imported pet coke availability were the other half. As of July 30, the north-east China No.1 petroleum coke spot price index was RMB 4,415.73 per tonne, the Shandong No.2 petroleum coke spot price index was RMB 4,276.73 per tonne, the Shandong No.3 petroleum coke spot price index was RMB 3,738.11 per tonne, and the Shandong No.4 petroleum coke spot price index was RMB 2,093.05 per tonne.

The cost increase in pet coke, coupled with many other factors, contributed to the increased prebaked anode price. According to the data revealed by Mysteel, the July 2026 prebaked anode procurement benchmark price at a major Shandong-based aluminium smelter increased by RMB 30 per tonne month-on-month, with the set at RMB 5,683 per tonne by cash and RMB 5,707 per tonne by acceptance.

Notably, the price movement of anode in July was aligned with the upward pricing trends of upstream raw materials, petroleum coke and coal tar pitch, with rising feedstock costs successfully passed through to finished products. While the industry's overall cost faced mild pressure, it remained firmly above the breakeven line, with only marginal fluctuations.

Going by the latest prebaked anode price and taking into account that 400-450 kg of prebaked anodes is used for 1 tonne of primary aluminium production, then anode cost contribution would be around (RMB 5,683 per tonne anode × 0.42 tonne anode per tonne of aluminium) RMB 2,387 per tonne of aluminium.

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The second pressure point by oil – rising shipping costs

If the surge in oil prices has affected primary aluminium production cost, then the inflated maritime shipping cost cannot be ignored, which ultimately increases aluminium’s CIF price (cost, insurance, freight).

The closure of the Strait of Hormuz and the adoption of other alternative routes as a result have incurred higher shipping costs for aluminium producers and exporters. The Port of Sohar has emerged as an alternative shipping route, but it requires transshipment or inland transport from Gulf producers, raising shipment costs and delays.

Market indicators show marine insurance costs have risen sharply, with war-risk premiums increasing from around 0.25 per cent pre-conflict to as high as 3 per cent of vessel value. At the same time, tanker freight rates have surged amid reduced vessel availability and heightened risk.

Unlock key insights from leading companies and experts across the aluminium ecosystem with our e-Magazine "Mine to Market: Aluminium Producers & Manufacturers 2026"

Aluminium and oil connection reinforced

The connection between oil and aluminium is indirect but increasingly important. A rise in crude oil prices can influence petroleum coke markets, increase anode production costs and raise shipping expenses.

Senior Analyst with Price Futures Group, Phil Flynn, shares with Reuters that normalisation of oil flows from the Gulf will take about four to six months after the United States and Iran reach a durable ceasefire. He assumes full normalisation would be only possible by early 2027.

In this situation, the International Energy Agency (IEA) expects global oil demand to fall by 1 million bpd this year, before rebounding to rise 2 million bpd in 2027.

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

July’s increase in aluminium’s proportion of liquid aluminium exceeded expectations, and August is expected to edge up

Fri, 31 Jul 2026 13:30:00 +0530

According to SMM statistics, China's aluminium production in July 2026 (31 days) increased 1.6 per cent Y-o-Y; and 3.5 per cent M-o-M. Domestic demand was weak, and combined with a pullback in export orders for some downstream products, all industry chain segments were under pressure; however, driven by high processing fees for aluminium rod and billet, downstream procurement demand for liquid aluminium rose, pushing the proportion of liquid aluminium output in China higher.

The proportion of liquid aluminium in the month rose 1.1 percentage points M-o-M to 78.3 per cent, slightly exceeding expectations at the start of the month, with core growth coming from strong processing profits for some products, leading to higher-than-expected demand for liquid aluminium.

Based on SMM's proportion of liquid aluminium calculations, China's aluminium casting ingot production in July fell 15.1 per cent YoY and 1.4 per cent M-o-M.

Capacity changes: As of month-end July, SMM statistics showed China's existing aluminium capacity was approximately 46.29 million tonnes, flat M-o-M.

Production forecast: Entering August 2026, the traditional off-season for downstream continues, and demand for most downstream products is expected to further weaken. However, some primary processed material orders are performing well, boosting downstream enterprises' willingness to purchase liquid aluminium directly. Overall, the proportion of liquid aluminium is expected to rise 0.2 percentage points to 78.5 per cent.

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.

Vedanta Aluminium targets higher-value products as expansion shifts into growth phase

Fri, 31 Jul 2026 11:15:00 +0530

Vedanta Aluminium is entering a new phase of growth as major expansion projects near completion and the company shifts its focus towards higher-value aluminium products and lower production costs, prompting brokerages to reaffirm positive outlooks following a strong first-quarter performance.

Brokerages including ICICI Securities, CLSA, Citi, Nuvama and Emkay have maintained bullish views on the recently listed aluminium producer, citing rising production volumes, cost optimisation initiatives and ongoing capacity expansion as key drivers of future earnings growth.

ICICI Securities initiated coverage on Vedanta Aluminium with a 'Buy' rating and a target price of INR 520 (USD 5.54), highlighting the company's transition from a capital expenditure-intensive phase towards improving operational efficiency and profitability.

Expansion projects shift focus towards operational growth

Having completed much of its recent investment cycle, Vedanta Aluminium is now focused on maximising production from its expanded assets while improving product mix and reducing operating costs.

The brokerage expects aluminium production to grow at a rate of around 9 per cent through FY28, supported largely by capacity additions at the company's BALCO operations.

Alongside higher production volumes, Vedanta Aluminium is increasing its share of value-added aluminium products while expanding backward integration to produce more of its own raw materials, a strategy aimed at reducing production costs and improving margins over the longer term.

The company reported EBITDA of INR 102 billion (USD 1.07 billion) during the recent quarter, representing a 135 per cent Y-o-Y increase, driven by higher aluminium prices and improved production volumes.

To know the production, demand and consumption forecasts on bauxite and alumina, explore the report "Global Bauxite & Alumina Market Forecast to 2036: Supply–Demand, Trade Flows & Price Outlook"

Strong quarterly performance reinforces investor confidence

Vedanta Aluminium's financial performance continued to improve during the first quarter of FY27 following its listing after the demerger from Vedanta.

Consolidated net profit increased more than threefold Y-o-Y to INR 56.29 billion (USD 589. 69 million), while revenue from operations rose 46 per cent to INR 213.93 billion (USD 2.24 billion).

Total income reached INR 217.02 billion (USD 2.27 billion), with operating profit margin improving to 45 per cent from 26 per cent a year earlier. Net profit margin is also more than doubled to 31 per cent, while the company's net worth increased more than 86 per cent Y-o-Y to INR 304.41 billion (USD 3.19 billion).

Alongside its quarterly results, Vedanta Aluminium announced its first interim dividend of INR 8 (USD 0.084) per share for FY27, with August 5, 2026, fixed as the record date.

Cost discipline remains central to long-term growth

While the outlook for aluminium producers remains broadly supportive, brokerages said Vedanta Aluminium's ability to manage production costs will remain a key factor influencing its long term performance.

ICICI Securities projects the company's cost of production to decline to around USD 1,682 per tonne by FY28, although fluctuations in raw material and energy prices could continue to affect profitability. Like other aluminium producers, the company also remains exposed to global commodity price cycles, which can influence earnings and margins.

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Some aluminium plants in the Middle East announce production resumptions, overseas daily average aluminium production up 1.6 per cent M-o-M

Sat, 01 Aug 2026 23:45:00 +0530

According to SMM statistics, total outside-China aluminium production in July 2026 fell 6.7 per cent Y-o-Y, mainly due to a Y-o-Y decline in operating rates at Middle East aluminium smelters. Outside-China daily average production rebounded 1.6 per cent M-o-M, mainly driven by ongoing production resumptions at smelters in the Middle East and Iceland, as well as output increases brought by project ramp-ups and power-on commissioning in Indonesia, Vietnam, and other locations.

In July, there were many updates on operating aluminium capacity outside China. The details are as follows:

On July 1, an announcement on Hydro’s official website showed that the Slovalco aluminium smelter had reached an agreement with the Slovak government, allowing it to resume production of 75,000 tonnes of aluminium capacity, with production expected to start in 2026 Q4.
On July 2, according to overseas media reports, Magnitude 7 Metals will restart the No. 1 potline at its aluminium smelter in Marston, Missouri, adding 75,000 tonnes per year of primary aluminium capacity by the end of 2026.
On July 2, EGA announced that its plant in Al Taweelah had made progress in restoring production: anode removal for all pots had been fully completed; pot cleaning was about 90 per cent complete; and solidified aluminium blocks in over 20 per cent of pots had been cleared. On May 26, the first repaired pot was successfully restarted; as of July 2, 89 pots were in operation (1,262 pots in total).
On July 3, Vedanta Aluminium released a production report showing that in FY27 (2026 Q2), aluminium production at the Balco smelter reached 168,000 tonnes, up 10 per cent Q-o-Q and up 17 per cent YoY, mainly benefiting from trial production output from expanded capacity.
On July 15, Rio Tinto released its Q2 results report, noting continued capacity increases at Kitimat, NZAS, and AP60. The last two potlines at the Arvida aluminium smelter were closed as planned in June, and Arvida AP60 is expected to reach full production by year-end.
On July 16, Alcoa released its Q2 results report. Its production reached 636,000 mt, up 5 per cent Q-o-Q, mainly benefiting from the completion of production resumptions at the San Ciprián smelter in Spain, ongoing production resumptions at the Alumar smelter in Brazil, and the completion of production resumptions at the Lista smelter in Norway and the Portland smelter in Australia.

Looking ahead to August 2026, production resumptions in the Middle East are expected to continue; new projects previously commissioned in Indonesia and Vietnam are expected to continue ramping up production; and Balco’s expanded capacity in India is expected to continue ramping up.

Although the Middle East conflict has flared up again, market feedback indicates it has not affected smelter production again. Overall, outside-China aluminium production is expected to maintain the M-o-M growth trend in the short term.

However, recent market rumours suggest that construction progress for some aluminium projects in the Middle East and Indonesia has fallen short of expectations, and continued attention should be paid to subsequent announcements from relevant smelters in the Middle East, Indonesia, and India.

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.

Two major factors boost market confidence, short-term aluminium prices consolidate on a strong note

Fri, 31 Jul 2026 22:30:00 +0530

Macro perspective

The US Fed announced on Wednesday that it held rates steady at 3.50 per cent-3.75 per cent, marking the fifth consecutive meeting with no change. According to the CME FedWatch Tool, after the Fed’s decision, the probability of rates remaining unchanged in September and October increased, and the marginal constraint on the nonferrous metals sector continued to ease.

The Strait of Hormuz dispute remains unresolved; according to foreign media reports, the temporary truce between the US and Iran shifted again. Foreign Ministry Spokesperson Lin Jian said at a regular press conference that China’s stance on China-US economic and trade issues is consistent and clear; China opposes all forms of unilateral tariff measures, and a tariff war or trade war serves the interests of neither side.

Fundamentals

Regarding markets outside China, production resumptions and new capacity for aluminium outside China continued to ramp up as planned. Market expectations for the global aluminium market to shift from tight to loose over the long term persisted, continuously limiting upside room for aluminium prices. However, the US-Iran conflict was still escalating, and disruptions to shipping in the Strait of Hormuz persisted.

The market worried about disrupted inputs of regional aluminium raw materials and outbound shipments of finished aluminium. Combined with rising crude oil prices pushing up energy costs for smelting outside China, regional geopolitical risk premiums remained. Supply uncertainty persisted, providing some floor support for aluminium prices in the short term. In the Chinese market, on the supply side, the proportion of liquid aluminium in China continued to rise.

On the inventory side, China’s aluminium social inventory destocked by 53,000 tonnes W-o-W to 953,000 tonnes last Thursday, and destocked by 26,000 tonnes compared to Monday. The destocking pace accelerated again at month-end, with inventory falling below 1 million tonnes, forming strong support for aluminium prices. On the export front, the SHFE/LME price ratio continued to repair this week.

As of July 30, the SHFE/LME price ratio had rebounded to 7.4, up 13.8 per cent from the prior low of 6.5, and the import loss narrowed to around RMB 3,300 per tonne, a contraction of over 45 per cent from the prior maximum loss of RMB 7,604 per tonne.

In Summary, the macro front improved recently, with the marginal constraint of interest rate hike expectations on the nonferrous metals sector continuing to ease. The proportion of liquid aluminium in China kept rising, Middle East geopolitical risk premiums persisted, and China’s aluminium ingot inventory continued to destock, jointly underpinning aluminium price movement.

Short-term market confidence strengthened markedly. However, the continued rollout of long-term aluminium capacity outside China, weak end-use demand in China, combined with shifting expectations for US Fed interest rate hikes and uncertainty from the Middle East geopolitical situation, still put some pressure on upside room for aluminium prices. In the short term, aluminium prices are expected to consolidate on a strong note; next week, the most-traded SHFE aluminium contract is expected to move within a range of RMB 23,000-24,150 per tonne, and LME aluminium within a range of USD 3,100-USD 3,250 per tonne.

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.

Expectations for US Fed interest rate hikes ease marginally, aluminium’s continuous destocking underpins the market

Fri, 31 Jul 2026 05:20:00 +0530

Futures: The most-traded SHFE aluminium contract opened at RMB 23,650 per tonne in the night session on July 30, with a high of RMB 23,725 per tonne, a low of RMB 23,630 per tonne, and finally settled at RMB 23,720 per tonne, up 0.40 per cent from the previous close. During this period, prices consolidated higher and closed with a bullish candlestick, holding firmly above the MA5 (23,587.56), MA10 (23,462.56), MA20 (23,346.68), MA40 (23,297.85), and MA60 (23,371.70) moving averages, which formed strong support and drove the price centre continuously higher.

Open interest edged down during this period, continuing the pattern of bearish position reduction, with the price rise fuelled by bear exits. Technically, on the 4-hour MACD, the DIFF (109.33) remained above the DEA (60.99), and the histogram continued expanding, indicating ample short-term bullish momentum. On July 30, LME aluminium opened at USD 3,181 per tonne, with a high of USD 3,211.5 per tonne, a low of USD 3,171.5 per tonne, and finally settled at USD 3,193 per tonne, up 0.52 per cent from the previous close.

The price extended its low-level consolidation and recovery, closing with a small bullish candlestick, holding above the short-term MA5 (3,178.34) and MA10 (3,172.71), and testing the MA20 (3,182.56) resistance, while the medium and long-term MA40 and MA60 still capped the upside. Trading volume edged up slightly on the day, while open interest declined notably, mainly from bearish position reduction, with bulls showing limited initiative to buy.

Technically, on the daily MACD, the DIFF (-31.41) was above the DEA (-47.23), and the histogram expanded slightly, as the low-level recovery continued, but the rebound height was constrained by the medium and long-term moving averages.

Macro front: US economic growth slowed more than expected in Q2, but robust consumption and business investment showed resilient domestic demand. Preliminary data from the US Bureau of Economic Analysis released on Thursday indicated that Q2 real GDP grew at an annualised rate of 1.5 per cent, below market expectations.

A decline in net exports weighed on the overall figure, but consumer spending and business investment remained strong, partially offsetting external pressures. Data from the US government on Thursday showed the June PCE price index fell 0.1 per cent M-o-M, marking the first monthly decline since the pandemic began in 2020, further explaining why the US Fed opted to hold rates steady this week. Annual PCE inflation slowed to 3.7 per cent from May's three-year high of 4.1 per cent.

Fundamentals: Supply side, the proportion of liquid aluminium in China continued to rise. Inventory side, China's aluminium social inventory destocked by 53,000 tonnes from last Thursday to 953,000 tonnes, and by 26,000 tonnes from this Monday.

At July month-end, destocking accelerated again and the inventory fell below the 1 million tonnes mark, providing solid support for aluminium prices. On the export front, the SHFE/LME price ratio continued to recover this week. As of July 30, the ratio had rebounded to 7.4, up 13.8 per cent from its earlier low of 6.5, while import losses narrowed to around RMB 3,300 per tonne, a reduction of over 45 per cent from the previous maximum loss of RMB 7,604 per tonne.

The operating rate of leading downstream processing enterprises in China's aluminium industry recorded 60.2 per cent this week, down 0.9 percentage points M-o-M. As the off-season effect deepened and rising aluminium prices suppressed purchasing, various sectors generally fell under pressure. Aluminium wire and cable and secondary aluminium saw the largest declines, while primary aluminium alloy, aluminium extrusion, aluminium plate/sheet and strip, and aluminium foil also weakened in tandem.

Primary aluminium market: The centre of SHFE aluminium 2608 contract futures was higher than the same period of the previous trading day during early trading. Rising aluminium prices noticeably dampened market purchasing sentiment. During the day, some suppliers quoted on par with the SHFE aluminium 2608 contract, and market price acceptance remained weak.

Mainstream transaction prices were mainly between a discount of RMB 10 per tonne and parity against the SHFE aluminium August contract. Today's shipment sentiment index in east China was 3.13, down 0.03 M-o-M; the purchasing sentiment index was 2.90, down 0.10 M-o-M. Aluminium futures rose again, keeping trading sentiment in the central China market sluggish.

Suppliers tended to sell large volumes at higher prices, resulting in ample spot circulation. However, downstream processing enterprises showed low purchase willingness, with only a few traders purchasing and stockpiling at low discounts. Ultimately, the actual transaction price range in the central China market was around a discount of RMB 120-160 per tonne against the SHFE aluminium August contract. Today's shipment sentiment index in central China was 3.18, up 0.06 M-o-M; the purchasing sentiment index was 2.80, down 0.02 M-o-M.

Aluminium scrap: Today, SMM A00 spot aluminium closed at RMB 23,630 per tonne, up RMB 230 per tonne from the previous trading day, with aluminium scrap market prices generally following the increase by RMB 100-200 per tonne across regions. Regarding price differences, as of July 30, the price difference between A00 aluminium and mixed aluminium extrusion scrap free of paint in Foshan was approximately RMB 2,070 per tonne, while the price difference between A00 aluminium and shredded aluminium tense scrap was about RMB 860 per tonne.

Amid the consumption off-season, aluminium scrap suppliers' willingness to sell at low prices was generally low, keeping overall aluminium scrap prices firm. On the demand side, with the arrival of the high-temperature holiday period, the operating rate of downstream cast aluminium alloy enterprises declined, and orders shrank; operating rates at secondary aluminium plate/sheet and strip enterprises were moderate, but overall raw material demand support had clearly weakened compared with Q2.

In the short term, the tight supply of compliant, invoiced cargoes persists, and suppliers' reluctance to sell at low prices provides bottom support for prices. On the import side, the lagged effects of the UAE export ban and the EU's tariff policy increase will gradually become apparent in the coming months, with port arrivals, June-August, staying low.

On the demand side, the sluggish downstream orders trend is unlikely to change in the short term, and scrap utilisation enterprises will most likely continue their strategy of purchasing as needed and maintaining low inventories, making it difficult for the purchasing atmosphere to see significant improvement.

Secondary aluminium alloy: Spot side: Today, ADC12 market quotes showed a general upward trend, with most enterprises raising by RMB 100 per tonne. Driving factors side, influenced by the continuous rise in primary aluminium prices and futures, cost support further strengthened, and enterprises generally followed the uptrend.

However, demand side, with the arrival of the high-temperature holiday, downstream enterprises' operating rates dropped, orders at secondary aluminium plants shrank, shipment pace slowed, and actual transactions were subdued. Short-term market is expected to maintain a tug-of-war pattern between cost support and demand constraints, and future price trends will still need to closely track aluminium price fluctuations and changes in downstream procurement demand.

Comprehensive outlook: Recently, macro front improved expectations for US Fed interest rate hikes continued to ease marginal constraints on non-ferrous sector, domestically the proportion of liquid aluminium kept rising, and the Middle East geopolitical risk premium continued to overlay with domestic aluminium ingot destocking, jointly underpinning aluminium price performance. Short-term market confidence significantly strengthened.

However, overseas aluminium long-term capacity is being continuously put into production, traditional end-use demand in China is weak, and repeated expectations for US Fed interest rate hikes and uncertainties in Middle East geopolitical situation are disturbing, putting some pressure on upside room for aluminium prices. Short-term aluminium prices maintained a consolidation pattern on a strong note.

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.