Aluminium concluded the trading session with a 0.45% increase, reaching Rs. 331.30 per kg. This rise was bolstered by a reduction in inventories within warehouses monitored by the Shanghai Futures Exchange, which saw a decline of 10.3% from the previous Friday, totalling 212,858 tonnes. However, gains remained constrained by enduring concerns regarding a potential global surplus in 2027. Supply conditions exhibited positive developments as Emirates Global Aluminium recommenced operations of 631 out of 1,262 reduction cells at its Al Taweelah smelter, thereby reinstating 50% of its capacity, with full production anticipated by the first quarter of 2027.
Meanwhile, China’s primary aluminium production exhibited robust performance, totalling 11.84 million tonnes in the third quarter, reflecting a year-on-year increase of 2.2%. Additionally, September output rose by 3.1%, amounting to 3.91 million tonnes. Production in the initial three quarters increased by 3.8% to 35.03 million tonnes, indicative of persistent high operating rates despite the enduring annual capacity limit of 45 million tonnes. Expectations of increased supply from Indonesia and the recovery of Gulf smelter operations have further impacted the outlook, as Indonesian aluminium exports surpassed 150,000 tonnes in August.
Japan’s aluminium buyers have consented to pay premiums of $255 per tonne for shipments scheduled between October and December, reflecting a 35% decrease from the prior quarter, which suggests a reduction in supply constraints. The International Aluminium Institute reported global primary aluminium production of 6.014 million tonnes in September, compared with 6.10 million tonnes a year earlier, while China’s estimated output stood at 3.75 million tonnes. Despite recent production disruptions in the Gulf region, the improving supply availability and expectations of a potential surplus exceeding 1 million tonnes in 2027 continue to pose significant concerns for the market.
Technically, the market is experiencing short covering, evidenced by a 3.84% decline in open interest to 4,306 contracts, alongside a price increase of Rs. 1.50. Aluminium is presently encountering support at Rs. 329, with an additional level at Rs. 326.50, while resistance is established at Rs. 332.50. A sustained move above this resistance could extend the recovery toward Rs. 334, whereas a break below immediate support may trigger renewed selling pressure.
