Aluminium prices experienced a decline of 0.5%, closing at Rs 366.9, primarily attributed to profit-taking following the recent significant rally spurred by geopolitical tensions in the Middle East. The U.S. decision to implement a maritime blockade on Iran sparked initial apprehensions regarding potential supply disruptions; however, the market exhibited a degree of stabilization as traders proceeded to secure their profits.

The overarching perspective continues to be constrained. The Gulf region, accounting for approximately 9% of global aluminium supply, is experiencing ongoing disruptions, as significant facilities such as Emirates Global Aluminium’s Al Taweelah smelter require additional time to fully resume operations. In light of this, premiums for immediate delivery have escalated, with LME cash premiums reaching their highest point since 2007, indicating a constriction in near-term supply.

Simultaneously, Japanese purchasers are incurring the highest premiums in more than ten years, thereby reinforcing the narrative of constrained supply. Nevertheless, the increase in inventories in Shanghai, approaching six-year peaks, coupled with weaker Chinese imports, indicates that demand continues to exhibit a degree of caution in the face of price fluctuations. Looking ahead, JP Morgan holds an optimistic outlook, forecasting a considerable global deficit in 2026 and possible price increases as supply disruptions continue.

From a technical perspective, the market is experiencing long liquidation, as evidenced by a 4.83% decline in open interest, bringing it down to 3,288. Immediate support is identified at Rs 364.7, with potential downside toward Rs 362.4, while resistance is established at Rs 368.6. A breakout above this level may propel prices toward Rs 370.2.