- Chinese exports ease supply shortage concerns
- Indian-origin stocks hit two-year low
LME aluminium prices slipped w-o-w after the recent sharp rally, as profit-booking and cautious physical buying weighed on market sentiment. However, lower exchange inventories, tight nearby availability, and ongoing Middle East tensions limited sharper downside pressure. LME three-month aluminium prices settled at $3,539/t in the week ended 12 June 2026, down by 4% from $3,691/t in the previous week.
Aluminium prices opened the week near $3,600/t, declined to a mid-week low of around $3,480/t amid profit-booking pressure, before recovering to approximately $3,532/t and stabilising towards the weekend.
Meanwhile, LME aluminium inventories declined by 3.2% w-o-w to 325,090 t from 335,910 t, indicating continued tightness in visible exchange stocks.
Profit-booking cools aluminium rally
LME aluminium prices witnessed a sharp correction in early June 2026, falling from around $3,855/t on 2 June to nearly $3,489/t by 10 June, a decline of approximately 9.5% within just over a week. The correction was primarily driven by profit-booking and the unwinding of speculative long positions that had accumulated during the recent rally fueled by geopolitical tensions and supply disruption concerns.
As market participants reassessed the severity of supply risks, particularly in the Middle East, a portion of the geopolitical premium embedded in aluminium prices was gradually removed. Additionally, a stronger US dollar weighed on the broader metals complex, as dollar-denominated commodities became more expensive for buyers using other currencies, reducing purchasing interest.
Another key factor was the increase in Chinese aluminium exports, which improved metal availability in global markets and eased concerns over immediate supply shortages. Weaker physical buying activity also contributed to the decline, with consumers adopting a cautious stance amid elevated prices and heightened market volatility.
However, despite the sharp fall in prices, LME aluminium inventories continued to decline, reaching their lowest levels in over a year, while Indian-origin stocks dropped to a two-year low. This suggests that the recent correction was largely driven by macroeconomic and financial factors rather than a deterioration in underlying physical demand or a significant improvement in supply fundamentals.
Outlook
Aluminium prices are expected to remain rangebound in the coming weeks. Lower buying activity and higher Chinese exports may keep prices under pressure, but low inventory levels and ongoing Middle East tensions are likely to prevent any sharp fall. The market is expected to move within a narrow range until clearer demand signals emerge.
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