Aluminium prices experienced a decrease of 0.30%, concluding at Rs 328.20, influenced by anticipations of enhanced global supply subsequent to previous disruptions stemming from the Iran conflict. Market sentiment showed signs of deterioration following the announcement from Emirates Global Aluminium regarding the quicker-than-anticipated recovery of production at its Al Taweelah complex. However, it is noted that full hot metal output may still require up to a year to reach normalisation. Additional supply optimism emerged following Norsk Hydro’s confirmation of plans to partially restart production at its Slovalco aluminium smelter in Slovakia in the fourth quarter of 2026, bolstered by a new long-term power agreement.

Increased aluminium production in China, coupled with the growing output from Indonesian smelters, has exerted additional pressure on prices.  Fundamentally, China continued to report resilient industrial activity, with the official Manufacturing PMI improving to 50.3 in June, indicating expansion in factory activity. In May, China’s aluminium production experienced a year-on-year increase of 1.7%, reaching 3.89 million tonnes. This marks the ninth consecutive month of growth. Additionally, output for the first five months of the year rose by 3.5%. Chinese exports of unwrought aluminium and aluminium products exhibited resilience, rising by 5.7% in May.

However, inventories monitored by the Shanghai Futures Exchange decreased by 2.7%, suggesting consistent domestic consumption. Global primary aluminium production experienced a decline of 1.7% year-on-year in May, totalling 6.15 million tonnes, as reported by the International Aluminium Institute. Goldman Sachs maintains its forecast for a substantial global aluminium deficit of 720,000 tonnes in 2026, attributing this to a slower recovery in Middle East smelting operations, even in light of the recent enhancements in production outlook.

Technically, the market continues to experience fresh selling pressure, as evidenced by a 1.71% increase in open interest alongside declining prices, suggesting the establishment of new short positions. Aluminium exhibits immediate support at Rs 326.3, with subsequent support at Rs 324.2. Resistance is identified at Rs 329.9. A sustained move above this level could trigger further gains toward Rs 331.4.