Aluminum prices top $3,000 for the first time since 2022 as supply risks grow
Global aluminium prices surge to $3,000 per tonne, the highest in over three years, driven by China’s production cap, rising demand in key sectors, and supply disruptions like South32’s Mozal smelter shutdown. Indian aluminium futures rise modestl...
By Akash Podishetti, ETMarkets.com |
AP
Aluminium prices have climbed to around $3,000 a tonne, according to Bloomberg, hitting this level for the first time in more than three years, as worries over supply meet expectations of steady long-term demand. The recent rise suggests that the global aluminium market may be entering a tighter phase after a long period of relatively comfortable supply, analysts said earlier.
One of the main reasons behind the price increase is China's continued cap on aluminium smelting capacity. China, the world's largest aluminium producer, has set a ceiling of 45 million tonnes on annual output. As demand for aluminium grows across sectors such as construction, power, transport and electric vehicles, this cap is expected to limit fresh supply. With production growth constrained, prices have found support in recent weeks.
Aluminium prices on the London Metal Exchange have risen for three straight trading sessions, reflecting this tightening outlook.
In India, aluminium prices have also edged higher, though the move has been modest. On the Multi Commodity Exchange (MCX), aluminium futures rose slightly on Friday. January delivery contracts gained about Rs 5.07, or 1.92%, to trade near Rs 297.20 per kg, with trading volumes of over 1,210 lots.
Market participants quoted by PTI said the overall mood in domestic aluminium futures remains cautious. In the absence of any major new global trigger, traders have been selective, stepping in only when prices dip. This has kept gains limited for now, even as global prices move higher.
Concerns around global supply have also increased following recent developments in the mining and metals industry. South32, a major Australia-based mining company, announced that its Mozal aluminium smelter in Mozambique will be put under care and maintenance by March 2026.
The decision was taken after the company failed to secure a new long-term power agreement. Analysts believe this shutdown will reduce global aluminium supply further, adding pressure to an already tight market.
China's stance on controlling overcapacity is another important factor. Authorities have made it clear that they want to rein in excess metal production to ease deflationary pressures on manufacturers. Although China may Although China may slightly exceed its 45 million tonne cap this year, it is discouraging smelters from expanding production in 2026. This approach is likely to keep supply growth in check, supporting aluminium prices over the medium term.
Also read: Gold, silver or stocks in 2026? How to invest Rs 10 lakh in new year for balanced returns
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
One of the main reasons behind the price increase is China's continued cap on aluminium smelting capacity. China, the world's largest aluminium producer, has set a ceiling of 45 million tonnes on annual output. As demand for aluminium grows across sectors such as construction, power, transport and electric vehicles, this cap is expected to limit fresh supply. With production growth constrained, prices have found support in recent weeks.
Aluminium prices on the London Metal Exchange have risen for three straight trading sessions, reflecting this tightening outlook.
In India, aluminium prices have also edged higher, though the move has been modest. On the Multi Commodity Exchange (MCX), aluminium futures rose slightly on Friday. January delivery contracts gained about Rs 5.07, or 1.92%, to trade near Rs 297.20 per kg, with trading volumes of over 1,210 lots.
Market participants quoted by PTI said the overall mood in domestic aluminium futures remains cautious. In the absence of any major new global trigger, traders have been selective, stepping in only when prices dip. This has kept gains limited for now, even as global prices move higher.
Concerns around global supply have also increased following recent developments in the mining and metals industry. South32, a major Australia-based mining company, announced that its Mozal aluminium smelter in Mozambique will be put under care and maintenance by March 2026.
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The decision was taken after the company failed to secure a new long-term power agreement. Analysts believe this shutdown will reduce global aluminium supply further, adding pressure to an already tight market.
China's stance on controlling overcapacity is another important factor. Authorities have made it clear that they want to rein in excess metal production to ease deflationary pressures on manufacturers. Although China may Although China may slightly exceed its 45 million tonne cap this year, it is discouraging smelters from expanding production in 2026. This approach is likely to keep supply growth in check, supporting aluminium prices over the medium term.
Also read: Gold, silver or stocks in 2026? How to invest Rs 10 lakh in new year for balanced returns
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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