Aluminium prices concluded at Rs 340.35, reflecting a 0.62% increase, bolstered by escalating geopolitical tensions between the United States and Iran. This situation has tempered expectations regarding the resumption of Middle Eastern aluminium smelters and heightened apprehensions about global supply availability. Additional support emerged from a depreciating U.S. dollar following the Federal Reserve’s decision to maintain interest rates, even as three FOMC members expressed a preference for an increase. Chair Kevin Warsh reaffirmed the central bank’s commitment to its 2% inflation target, while expectations for a September rate hike moderated, leading to an improvement in sentiment across industrial metals.

Supply fundamentals continued to exhibit support, notwithstanding certain mitigating factors. Emirates Global Aluminium has recommenced operations at its Al Taweelah alumina refinery after a three-and-a-half-month hiatus, thereby enhancing the availability of alumina. Aluminium inventories in LME-registered warehouses have fallen to 267,800 tonnes, marking the lowest level recorded this century and underscoring the tightness of exchange supplies. Alcoa has revised its 2026 alumina production guidance downward by 200,000–300,000 tonnes, now estimating a total of 9.5–9.6 million tonnes, attributed to operational disruptions in Western Australia. According to the International Aluminium Institute, global primary aluminium production experienced a year-on-year decline of 1.5%, totalling 5.98 million tonnes in June, while output from the Gulf region decreased by nearly one-third.

Meanwhile, aluminium inventories at Japan’s major ports decreased by 7.8% to 220,300 tonnes, indicating a strengthening in regional demand. China maintained a crucial position in the global supply chain. The country exported a record 711,000 tonnes of unwrought aluminium and aluminium products in June, reflecting a 12.5% increase from May. Additionally, first-half exports rose by 16.3% year-on-year, totalling 3.4 million tonnes. Simultaneously, China’s primary aluminium production increased by 4.7% to 3.98 million tonnes, whereas imports fell by 17.4%, indicating a decline in import arbitrage opportunities.

Technically, the market observed new buying activity, as open interest rose by 1.55% to reach 4,006 contracts, accompanied by an increase in prices. Aluminium is currently maintaining immediate support at Rs 338.2, with a potential breach likely to challenge Rs 336.0. On the upside, resistance is positioned at Rs 342.2, and a sustained move above this level could extend gains toward Rs 344.0, thereby maintaining a cautiously positive near-term technical outlook.