Aluminum Retreats

Aluminum futures in the UK were near $3,250 per tonne, trading in a narrow range since declining from an eight-week high of $3,360 on August 11th amid momentary relief of tight supply. Exports of aluminum from China, the world's top producer, surged by 18.7% in the year to July. The country has stepped up exports as muted demand allowed producers to ship metal despite Beijing's output cap of 45 million tons, easing shortages from the Middle East due to the war in Iran. 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. This added to detriment to its client Norsk Hydro, which 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. LNG supply from the Middle East, essential for aluminum refining, has been scarce due to tanker blockades from the US and Iran.

Aluminum futures in the UK fell to $3,200 per tonne, easing from an eight-week high of $3,360 reached on August 11, as higher supply from China offset the disruption from the Middle East war. Exports of aluminum from China, the world's top producer, surged by 18.7% in the year to July. The country has stepped up exports as muted demand allowed producers to ship metal despite Beijing's output cap of 45 million tons, easing shortages from the Middle East due to the war in Iran. 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. This added to detriment to its client Norsk Hydro, which 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. LNG supply from the Middle East, essential for aluminum refining, has been scarce due to tanker blockades from the US and Iran.

Aluminum futures in the UK fell toward $3,200 per tonne, retreating from a seven-week high hit on August 11, amid easing supply concerns. Emirates Global Aluminium set out plans to restore production at its Al Taweelah smelter, which was shut down following an Iranian strike during the early stages of the war. The smelter is operating at 18% of capacity and is expected to return to prewar output levels in Q1 2027. This will improve the supply outlook from a region that accounted for 10% of global production before the conflict. Prices had risen recently as Norsk Hydro cut output at its Alunorte refinery in Brazil after its natural gas supplier reported disruptions, while uncertainty persisted over a deal that could reopen the Strait of Hormuz, a key export route for regional smelters. Meanwhile, Australia’s largest aluminium smelter, Tomago, secured a A$2.5 billion government support package to ensure its continued operation beyond 2028, further boosting supply prospects.