Aluminium concluded the trading session with a slight decline of 0.11%, settling at Rs. 329.95. This downturn was influenced by enhancing global supply expectations and the anticipation of a possible market surplus by 2027. However, losses were constrained by the contraction of global inventories, which fell to a mere 44 days of consumption, marking the lowest level in recent years and indicative of robust demand. Additional support emerged from a depreciated US dollar in the aftermath of the Democratic triumph in the US midterm elections. Supply expectations are gradually improving as production in the Middle East recovers, output in China remains resilient, and capacity in Indonesia continues to expand.
Earlier estimates of 3-3.5 million tonnes of lost Middle Eastern production have been adjusted downward, with annual losses now anticipated to stay under 2 million tonnes. Emirates Global Aluminium has resumed operations at 631 of its 1,262 reduction cells at the Al Taweelah smelter, thereby reinstating around 50% of its capacity. Full production is anticipated by the first quarter of 2027. Meanwhile, China’s aluminium inventories monitored by the Shanghai Futures Exchange experienced a decline of 30.6% compared to the previous Friday. China’s primary aluminium production totalled 11.84 million tonnes in the third quarter, reflecting a year-on-year increase of 2.2%.
In September, production experienced a rise of 3.1%, reaching 3.91 million tonnes. Cumulative production during the first nine months rose by 3.8% to 35.03 million tonnes, bolstered by robust smelting margins and elevated operating rates. However, the International Aluminium Institute reported global primary aluminium production of 6.014 million tonnes in September, down from 6.10 million tonnes a year earlier, indicating continued weakness in overall global output.
Conversely, anticipations of a rebound in Middle Eastern supply alongside an increase in Indonesian production may enhance availability and exert downward pressure on prices in the medium term. Technically, the market is experiencing long unwinding, as open interest has decreased by 0.11% to 3,612 contracts, accompanied by a price decline of Rs. 0.35. Aluminium is presently encountering support at Rs. 329.50, with subsequent support at Rs. 329, while resistance is established at Rs. 330.50. A sustained move above this level could extend the recovery toward Rs. 331.50.
