Aluminium prices concluded the trading session nearly flat, declining by 0.01% to close at Rs 346.45. This slight decrease followed a wave of profit-taking after recent increases, influenced by a robust U.S. dollar and heightened anticipations of a more stringent Federal Reserve policy. The U.S. dollar index reached a three-week peak as rising tensions in the Middle East drove oil prices upward, leading markets to raise the likelihood of a U.S. interest rate increase. Despite the mild correction, the downside remained constrained owing to ongoing supply concerns and diminishing global inventories.

Visible aluminium stocks in London Metal Exchange warehouses have reached their lowest levels since 2022, while inventories in Shanghai Futures Exchange warehouses experienced a decline of 1.12% over the week, indicating consistent physical demand. Supply-side fundamentals continued to exhibit support after Alcoa revised its 2026 alumina production guidance downward by 200,000–300,000 tonnes due to operational disruptions at its Pinjarra refinery in Australia. Japanese buyers have consented to a historic quarterly premium of $395 per tonne for shipments scheduled from July to September, underscoring robust regional demand.

According to the International Aluminium Institute, global primary aluminium production experienced a year-on-year decline of 1.5% in June, totalling 5.98 million tonnes. This decrease is primarily attributed to a substantial reduction in output from the Gulf region. Meanwhile, aluminium stocks at major Japanese ports experienced a decline of 7.8% in June. China maintained robust export performance, with unwrought aluminium exports hitting a record 711,000 tonnes in June, while imports experienced a year-on-year decline of 17.4%. Morgan Stanley anticipates that the aluminium market deficit will contract in 2026, transitioning into a surplus starting in 2027.

However, the demand stemming from the growth of data centre construction is projected to offer sustained support in the long term. Aluminium is currently experiencing long liquidation, as evidenced by a 20.78% decline in open interest, which suggests profit booking following recent gains. Immediate support is positioned at Rs 344.20, with subsequent support at Rs 341.90, while resistance is identified at Rs 349.00. A sustained move above this level could extend gains towards Rs 351.50.