Aluminum Futures Rise as Tight Supply Meets Restart Risks

Written by Sandra Leggero

Sandra Leggero has a background in financial markets, having spent more than 9 years in commodities trading for several European and Asian companies. She holds a degree in Economics from the University of Pavia and specializes in emerging markets.

, | Updated: July 15, 2026

Key Moments

Aluminum prices increased 0.40 per cent to settle at INR 339.80 (USD 3.57), supported by low exchange inventories and supply concerns.
LME inventories stayed at their lowest level since 2022, while SHFE stocks declined 4.8 per cent, signaling robust physical demand.
Morgan Stanley expects the global aluminum market deficit to narrow during 2026 before shifting into surplus in 2027.

Price Action and Exchange Inventory Dynamics

Aluminum futures rose 0.40 per cent to close at INR 339.80 (USD 3.57), with the move underpinned by worries over supply and shrinking stocks across major metal exchanges.

Inventories at London Metal Exchange (LME) warehouses remained at their lowest level since 2022. At the same time, aluminum stocks on the Shanghai Futures Exchange (SHFE) fell 4.8 per cent, highlighting persistent demand for physical metal.

Market Indicator	Detail
Settlement price	INR 339.80 (USD 3.57)
Daily price move	+0.40 per cent
LME inventories	At lowest level since 2022
SHFE inventories	Down 4.8 per cent

Geopolitical Risks and Middle East Supply Outlook

Market sentiment was affected by renewed geopolitical concerns after fresh US strikes on Iranian targets, which raised the risk of disruptions to shipments through the Strait of Hormuz, a critical channel for aluminum exports from the Gulf region.

However, expectations that regional supply conditions could improve and that tensions in the Middle East might ease helped cap further price gains.

Alumina Supply: EGA Refinery Restart

On the supply side, Emirates Global Aluminium (EGA) restarted operations at its Al Taweelah alumina refinery following a shutdown of roughly three and a half months. The company expects output to reach 50 per cent of capacity within days and to return to full technical capacity by the end of the year. This ramp-up is expected to gradually enhance alumina availability.

Regional Demand Signals and Japanese Premiums

Demand indicators in Asia remained firm. Japanese buyers agreed to pay a premium of USD 395 per metric tonne for aluminum shipments for the July-September quarter, reflecting continued appetite for the metal in the region.

Production Trends: Global vs China

Data from the International Aluminium Institute (IAI) showed that global primary aluminum production fell 1.7 per cent year-on-year in May. In contrast, China registered a 1.7 per cent increase in aluminum production, and its exports also posted strong growth, aided by higher prices in overseas markets.

Region / Metric	Year-on-year change
Global primary aluminum production (May)	-1.7 per cent
China aluminum production	+1.7 per cent

Outlook: Market Balance and Demand Drivers

Morgan Stanley expects the global aluminum market deficit to narrow during 2026 and then shift into surplus in 2027. At the same time, the bank indicated that demand linked to expanding data center construction is likely to remain a supportive factor for aluminum consumption over the medium term.

Technical View: Support and Resistance Levels

From a technical standpoint, analysts pointed to evidence of short covering in the market. They identified immediate support at INR 338.5 (USD 3.56) and nearby resistance around INR 341.3 (USD 3.59).