- Supply tightness continues supporting aluminium rally
- Aluminium premiums surge to around $360/t
Domestic aluminium prices in India strengthened significantly w-o-w as of 4 Jun’26, supported by stronger trends on the Multi Commodity Exchange (MCX) and continued firmness on the London Metal Exchange (LME).
According to market assessments, P1020 ingot prices in Delhi NCR increased by INR 10,000/t w-o-w to INR 403,000/t on 4 Jun’26 from INR 393,000/t on 28 May’26. Meanwhile, Ex-Mumbai aluminium ingot P1020 prices increased by INR 8,000/t w-o-w to INR 403,000/t from INR 395,000/t during the same period.
How did Indian and global exchanges perform?
Domestic aluminium futures on the MCX traded firm w-o-w, increasing by INR 7,450/t, or 1.9%, to INR 393,790/t on 4 Jun’26 from INR 386,340/t on 28 May’26.
In comparison, three-month aluminium prices on the LME increased by $40/t, or 1.1%, to $3,704/t on 4 Jun’26 from $3,664/t on 28 May’26. Meanwhile, LME aluminium stocks declined by 2,550 t to 335,450 t from 338,000 t during the same period.
LME aluminium prices remained supported by tightening global supply conditions, continued exchange inventory drawdowns, and elevated Cash-3M premiums reflecting persistent prompt metal tightness. Meanwhile, ongoing geopolitical uncertainties surrounding Middle East shipping routes and stronger overseas demand continued supporting broader aluminium market sentiment despite volatile trading conditions.
Market updates
A major primary producer reported a sharp increase in domestic P1020 aluminium premiums to around $360/t, supported by higher LME aluminium prices and continued tightness in spot availability. Market participants noted that although buying interest remained cautious at elevated price levels, firm global benchmarks and ongoing declines in exchange inventories continued to support domestic offers. Additionally, rising replacement costs remained a key factor influencing premium levels across the market.
NALCO’s primary aluminium ingot (P1020, 99.7%) prices increased by INR 1,500/t, or around 0.4%, to INR 412,500/t on 1 Jun’26 from INR 411,000/t on 27 May’26, following the company’s latest price revision, reflecting continued firmness in domestic producer pricing amid elevated global aluminium market trends.
Meanwhile, BALCO recorded a 0.9% w-o-w increase, with average prices rising to INR 426,833/t from INR 422,900/t, while Hindalco prices increased by 2.4% to INR 433,417/t from INR 423,083/t during the same period.
MSMEs seek lower aluminium import duty as costs rise
India’s downstream aluminium industry, particularly MSMEs, has urged the government to reduce the 8.25% import duty on primary aluminium amid rising raw material and energy costs linked to the ongoing West Asia conflict. Industry bodies said higher global aluminium prices, supply-chain disruptions, and import-parity pricing have increased domestic input costs, while low-duty imports of finished aluminium products continue to pressure local manufacturers. The sector is also facing disruptions in LPG and natural gas supplies, with some downstream segments reporting a 40-50% decline in production. Stakeholders have called for duty relief and targeted support measures to help MSMEs manage mounting cost pressures.
Outlook
Domestic P1020 aluminium prices in India are expected to remain firm in the near term, supported by elevated LME aluminium prices, stronger producer pricing sentiment, and continued tightness in spot availability. Declining LME inventories, elevated Cash-3M premiums, and firm MCX trends are likely to keep domestic offers supported, while higher replacement costs and ongoing geopolitical uncertainties surrounding key shipping routes may continue influencing overall market sentiment despite cautious buying activity at elevated price levels.
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