Aluminium prices increased by 0.53% to close at Rs 265.7, bolstered by constricting global supply dynamics following Century Aluminium’s declaration of a two-thirds production cut at its Iceland smelter, attributed to an electrical equipment malfunction. The supply disruption arises in the context of apprehensions that China’s aluminium output cap of 45 million tonnes could be exceeded this year, heightening concerns regarding imminent shortages.

Beijing’s decision to decelerate industrial capacity expansion—reducing its annual base metal output target to 1.5% for 2025–26 from a previous 5%—has further solidified anticipations of a constricted supply in the future. Reports says that global primary aluminium output experienced a slight increase of 0.9% year-on-year, reaching 6.08 million tonnes in September. Aluminium inventories at Japan’s three principal ports experienced a modest uptick of 1.8%, reaching 341,300 tonnes, whereas the aluminium trade dynamics in China exhibited varied trends. In September, exports of unwrought aluminium and products decreased to 521,000 tonnes, down from 534,000 tonnes in August.

Conversely, imports surged by 35.4% year-on-year, reaching 360,000 tonnes. In the initial three quarters of 2025, China’s aggregate imports amounted to 3.01 million tonnes, marking a 5.7% increase compared to the corresponding timeframe in 2024, indicative of consistent demand. In the interim, Alcoa’s resolution to shutter its Kwinana alumina refinery in Australia, coupled with a rise in aluminium utilization in emerging data centers, has bolstered the long-term outlook for consumption.

From a technical perspective, the market is experiencing short covering, evidenced by a 7.05% decline in open interest to 2,096, alongside a price increase of Rs 1.4. Support is identified at Rs 264.7, and if prices fall below this level, they may approach Rs 263.7. Resistance is established at Rs 266.3, where a breakout could result in a rise to Rs 266.9.