Aluminum futures in the UK traded near $3,150 per tonne, extending their rebound from the four-month low of $3,085 hit earlier in July, as rising supply risks and tightening inventories supported prices. Geopolitical tensions intensified after the collapse of last month’s interim ceasefire deal between the US and Iran, with both sides stepping up attacks and shipping traffic through the Strait of Hormuz largely halted. The disruption has dimmed prospects for a resumption of aluminum exports from the Persian Gulf, which accounts for roughly 9% of global supply.
These pressures compound existing constraints, notably China’s 45 million-ton production cap, which is expected to become more binding this year. At the same time, inventories at LME warehouses remain near their lowest levels since 2022, while stockpiles on the Shanghai Futures Exchange continue to fall, underscoring resilient demand. Some relief may come from the restart of Emirates Global Aluminium’s Al Taweelah alumina refinery, which has resumed operations after a three-and-a-half-month outage.
