Aluminium concluded the trading session with minimal movement, rising by 0.01% to Rs 344.4. This stability was influenced by China’s commitment to implement fiscal policy measures aimed at bolstering economic growth, which counterbalanced the anticipation of enhanced production in the Middle East and ongoing supply availability. China’s Q2 GDP growth decelerated to 4.3%, heightening anticipations for further policy intervention to bolster economic activity and achieve the annual growth objective. A weaker US dollar has also bolstered aluminium prices, as investors express concerns regarding whether US Treasury efforts to stabilise bond markets might erode confidence in the currency. Aluminium stocks at three major Japanese ports experienced a month-on-month decrease of 8.8%, totalling 201,000 tonnes by the end of July. This decline is partially attributed to reduced imports from the Middle East, influenced by the ongoing conflict in Iran.

However, expectations of production restarts in the Middle East constrained potential gains, as EGA and Alba expedited their production recovery while alternative shipping routes mitigated supply disruptions. China’s aluminium production increased by 3.8% year-on-year, reaching 3.9 million tonnes in July, thereby contributing to supply pressure. Global primary aluminium output experienced a year-on-year decline of 1.7%, totalling 6.16 million tonnes in July. Notably, production in the Gulf region saw a significant drop of 44%, falling to 293,000 tonnes from 523,000 tonnes in the same month of the previous year. Regional daily output has decreased to 9,800 tonnes, significantly lower than the pre-war baseline of 17,800 tonnes. China’s July production was estimated at 3.866 million tonnes, reflecting a year-on-year increase of 2.7%.

In July, China exported 643,000 tonnes of unwrought aluminium and semi-finished products, reflecting an 18.6% increase compared to the same month last year, although this figure represents a 9.6% decline from the previous month. For the period from January to July, total exports rose by 16.7%, amounting to 4.04 million tonnes. Supply-side risks have continued to manifest, as Norsk Hydro has scaled back Alunorte alumina production to 50% capacity owing to diminished natural gas availability. Concurrently, Alcoa has revised its 2026 alumina production guidance downward by 200,000–300,000 tonnes, now estimating a total output of 9.5–9.6 million tonnes. EGA’s Al Taweelah smelter was functioning at 18% capacity and is anticipated to reach normalisation by early 2027.

Technically, the market is experiencing new buying activity, as evidenced by a 15.83% increase in open interest to 4,281, while prices have risen by Rs 0.05, suggesting a resurgence of bullish participation. Aluminium is currently experiencing support at Rs 342.5. A persistent breach beneath this threshold may initiate a downward movement toward Rs 340.7. On the upside, resistance is positioned at Rs 346.1, and a decisive move above this level could lead to further gains toward Rs 347.9.