Aluminium prices increased by 0.94%, closing at Rs 374.5, bolstered by ongoing supply concerns associated with rising geopolitical tensions in the Middle East. The current impasse between the United States and Iran has heightened concerns regarding potential interruptions in cargo transport from the Gulf region, especially via the Strait of Hormuz. Further backing emerged following indications that limitations on Iranian commercial vessels could persist for a prolonged duration, bolstering anticipations of constrained global supply.
Demand-side fundamentals continued to exhibit support, as robust manufacturing data from China enhanced market sentiment. The manufacturing PMI increased to 52.2 in April, indicating the most rapid expansion since December 2020, propelled by strong growth in new orders and output. Physical market indicators underscored tightening conditions, with aluminium stocks at major Japanese ports decreasing by 7.4%, while premiums for shipments reached their highest level in 11 years. China’s imports rose by 6.9% year-on-year in March, indicating robust demand even in the face of high prices.
On the supply front, global production trends exhibit a mixed landscape. In March, primary aluminium output saw a year-on-year increase of 0.9%; however, the marginal decrease in daily production rates indicates potential emerging constraints. Anticipations of a considerable supply shortfall in 2026, influenced by interruptions in production from the Middle East, persist in bolstering optimistic projections, with estimates indicating an upward trajectory in price levels in the forthcoming quarters.
From a technical perspective, the market is experiencing renewed buying interest, as evidenced by a 5.81% increase in open interest to 3,261 lots, alongside a price increase of Rs 3.5. Immediate support is observed at Rs 371, with potential further decline toward Rs 367.4. On the upside, resistance is positioned at Rs 376.7, and a sustained movement above this threshold could propel prices toward Rs 378.8.