Aluminium prices increased by 0.24% to close at Rs 333.25, bolstered by worries regarding possible supply interruptions in the Middle East and a decrease in global inventories. Market sentiment exhibited a degree of caution following reports of a vessel being hit in the Strait of Hormuz. Concurrently, Iran asserted that peace negotiations with the United States would not recommence unless President Donald Trump ceased his threats of renewed military action. The geopolitical uncertainty bolstered aluminium prices, reflecting the Gulf region’s significance in global production. Visible inventories also continued to provide support.
Stocks at the London Metal Exchange have decreased to 292,425 tonnes, marking the lowest point since September 2022. Meanwhile, inventories at the Shanghai Futures Exchange have seen a reduction of 1.4% compared to the previous week. Japanese buyers have consented to aluminium premiums of $395 per tonne for shipments scheduled between July and September, reflecting an increase of 12-13% compared to the preceding quarter, which underscores the tightening of regional supply. Emirates Global Aluminium has indicated a quicker-than-anticipated rebound at its Al Taweelah complex, though it may require up to a year to achieve full production levels.
Meanwhile, Norsk Hydro intends to initiate a partial restart of its Slovalco smelter in the fourth quarter of 2026. However, elevated aluminium production in China and the expanding smelter capacity in Indonesia persisted in limiting upward momentum. In May, China’s aluminium production experienced a year-on-year increase of 1.7%, contrasting with a global decline of 1.7% in primary aluminium production, as reported by the International Aluminium Institute.
Aluminium is currently experiencing short covering, as indicated by a 2.91% decline in open interest alongside an increase in prices. Immediate support is identified at Rs 331.5, with subsequent support at Rs 329.7, while resistance is established at Rs 334.6. A sustained move above this level could extend gains toward Rs 335.9.