Aluminum futures in the UK climbed above $3,210 per tonne, their highest level in nearly six weeks, driven by persistent supply constraints and slower output growth. Production outside China fell 6.7% year-on-year in July, largely reflecting lower operating rates at several smelters in the Middle East. These pressures have been exacerbated by China’s 45 million-ton annual production cap, which is expected to become increasingly restrictive this year.
Geopolitical tensions have further tightened the market, prompting consumers to draw down exchange inventories, with LME stocks dropping to their lowest level this century. Adding to supply worries, Alcoa Corp. cut its production guidance after operational issues at an Australian refinery.
Some of these constraints may be mitigated by planned capacity restarts and expansion projects. Notably, the Slovalco smelter in Slovakia is scheduled to restart in Q4 2026, and Metals’ Missouri smelter is expected to resume operations by year-end. Emirates Global Aluminium is also continuing to restore production at its Al Taweelah facility.
