Aluminum Rises to Near 2-Month High

Aluminum futures in the UK rose to $3,380 per tonne in August, the highest in nearly two months, on declining supply from key producers. The Alunorte plant in Brazil, the world's largest alumina plant outside of China, was forced to cut operations to half capacity amid the lack of natural gas from its supplier. The developments deepened the detriment to Norsk Hydro, the main client for Alunorte. The firm had already declared two force majeures on aluminum sales after its joint Qatari venture Qatalum plant was forced to shut off production on natural gas shortages after Iran had damaged energy and metallurgy infrastructure in the Middle East. Supply from nations in the Persian Gulf has been hampered since the start of the US-Iran conflict in March, due to both direct destruction of plants and blockades on trade routs for exports. The region is responsible for around 10% of global production pre-war. Still, futures are below four-year peaks from this year on softening Chinese demand.

Aluminum futures in the UK rose to around $3,320 per tonne, the highest level in seven weeks, amid ongoing supply constraints and weaker production. Output outside China fell 6.7% year-on-year in July, mainly due to reduced operating rates at several Middle Eastern smelters. These pressures were compounded by China’s 45 million-ton production cap, which is expected to become more restrictive this year. Geopolitical tensions have also prompted consumers to draw down exchange inventories, with LME stocks falling to their lowest level this century. In addition, Alcoa Corp. cut its production forecast following operational issues at an Australian refinery. However, some of these supply concerns could be partly offset by planned capacity restarts and expansion progress among some producers, including the restart of the Slovalco smelter in Slovakia in Q4 2026 and the Missouri smelter by year-end. Emirates Global Aluminium has also continued restoring production at its Al Taweelah facility.

Aluminum increased to 3216.00 USD/T, the highest since June 2026. Over the past 4 weeks, Aluminum gained 3.19%, and in the last 12 months, it increased 25.18%.