Aluminium prices experienced a modest increase in the previous session, closing 0.11% higher at Rs 330.6, bolstered by rising supply concerns associated with intensifying geopolitical tensions in the Middle East. Production disruptions have contributed to a bullish sentiment, as Qatalum and Aluminium Bahrain announced force majeure on shipments, heightening concerns over a tighter global supply. The Middle East represents approximately 8–9% of the world’s aluminium capacity.

The current conflict involving the U.S., Israel, and Iran has heightened the risk of additional disruptions, especially concerning shipping routes via the Strait of Hormuz. Decreasing inventories have underscored concerns regarding supply. LME aluminium stocks have decreased to 459,125 tonnes, marking the lowest level since July of the previous year, as a result of recent outflows from Port Klang in Malaysia.

Reports indicating that traders have sought the removal of over 45,000 tonnes from the same location imply a constriction in the availability within the physical market. Analysts maintain a generally positive perspective regarding the metal’s future prospects. Citi has adjusted its aluminium price target to $3,600 per tonne, presenting a bullish scenario that could see prices rise to $4,000. Meanwhile, Morgan Stanley anticipates prices will hit $3,700 by 2026, driven by limited supply and consistent demand.

From a technical perspective, the market is experiencing short covering, as evidenced by a 1.25% decline in open interest to 4,596 lots, accompanied by a slight increase in prices. Aluminium exhibits immediate support around Rs 327.8, with additional support positioned at Rs 324.8. On the upside, resistance is identified at Rs 335, and a breach of this threshold may propel prices toward Rs 339.2.