Aluminium prices increased by 0.17% to Rs 271.05, reflecting strong trends in the LME as prices surpassed $2,870 per tonne in October — the highest level in over three years — bolstered by constrained near-term supply and solid long-term demand expectations. China has reiterated its position on regulating metal overcapacity, upholding its annual aluminium production limit of 45 million tonnes, a threshold that could potentially be exceeded later this year.

Supply disruptions have also provided support, as Century Aluminium’s Iceland smelter has curtailed two-thirds of its output following an electrical failure, while Alcoa has announced the closure of its Kwinana alumina refinery in Australia due to declining bauxite grades. Simultaneously, the demand for aluminium exhibited resilience, driven by increasing electrification and the expansion of data centers, while the alleviation of trade tensions between the U.S. and China contributed to a more favorable sentiment. In terms of supply dynamics, global primary aluminium production experienced a year-on-year increase of 0.9%, reaching 6.08 million tonnes in September.

Japanese port stocks rose by 1.8% month-on-month to reach 341,300 tonnes, in contrast to a 3.2% decrease in inventories at the Shanghai Futures Exchange, underscoring a regional tightening in supply. In September, China experienced a notable increase in aluminium imports, rising 35.4% year-on-year to reach 360,000 tonnes. Conversely, exports saw a minor decline, totaling 521,000 tonnes, indicative of changing domestic demand dynamics.

Aluminium is currently experiencing a new wave of buying activity, as evidenced by an 11.85% increase in open interest, reaching 3,955 lots. Support is identified at Rs 269.3; a decline beneath this level may lead to a test of Rs 267.3. Conversely, resistance appears at Rs 272.3, with a breach above this threshold potentially driving prices toward Rs 273.3.