LME aluminum hits $3,216, six-week high, on supply squeeze
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Aluminum prices on the London Metal Exchange rose to $3,216.40 per tonne, the highest in six weeks, as global production outside China fell 6.7% year-on-year in July. Low inventory levels and supply disruptions exacerbated the squeeze.
Production Decline
Global aluminum output outside China dropped 6.7% in July from a year earlier, intensifying supply tightness. Middle Eastern smelters reduced output, and China maintained its 45-million-tonne production cap. The slowdown supported the price rally that pushed LME three-month futures to $3,216.40, the highest since late June.
Inventory Drawdown
LME aluminum inventories have fallen to their lowest levels in a century as consumers draw on exchange stocks rather than build new holdings amid geopolitical uncertainty. Alcoa lowered its production forecast after disruptions at its Australian refinery, further tightening the global supply outlook.
Planned Restarts
New capacity is expected to ease the supply squeeze later this year. Slovakia's Slovalco smelter is scheduled to resume production in the fourth quarter of 2026, while a new facility in Missouri, USA, is projected to come online by year-end. Emirates Global Aluminium continues expansion work at its Al Taweelah plant.
What's Next
The Slovalco smelter restart is slated for Q4 2026, and the US plant may begin operations by year-end. It remains unclear whether these capacity additions will be sufficient to offset the sustained decline in global production and restock depleted inventories.
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LME aluminum hits $3,216, six-week high, on supply squeeze
