Aluminium prices experienced a decline of 1.09%, settling at Rs 257.5, as Japan reported a 6.3% month-on-month increase in August stocks, thereby exerting additional pressure on the market. Nonetheless, losses were constrained as speculative bullish positions alongside robust physical demand initiated a significant reduction in LME inventories, which fell by nearly 100,000 tonnes to 375,000 in the early part of September. Supply risks intensified following the revocation of all mining licenses by Guinea’s government, jeopardizing ore production essential for Emirates Global Aluminium.

In terms of global balance, the aluminium market experienced a supply surplus of 183,100 tonnes in June, with production reaching 6.0944 million tonnes compared to consumption of 5.9113 million tonnes. Premiums extended to Japanese purchasers for fourth-quarter shipments have decreased to $98–103 per tonne, a decline from $108 in the previous quarter, indicative of subdued demand.

In July, global primary aluminium production experienced a year-on-year increase of 2.5%, reaching a total of 6.373 million tonnes. Regional dynamics exhibit a mixed landscape: European markets encounter constraints stemming from sanctions on Russia, whereas China persists in bolstering demand through supportive fiscal policies. In July, China recorded exports of 542,000 tonnes of unwrought aluminium and related products, whereas imports experienced a significant year-on-year increase of 38.2%, totaling 360,000 tonnes.

Aluminium is currently experiencing a phase of long liquidation, evidenced by a decline in open interest of 21.37%, bringing it down to 3,389. Support is established at Rs 256.1, with potential for additional decline toward Rs 254.8. Conversely, resistance is identified at Rs 259.6, and a breakout above this level may propel prices to Rs 261.8.