- Indian aluminium premiums hold despite softer demand
- Tight primary supply limits aluminium price decline
Domestic aluminium prices in India edged lower w-o-w as of 31 July 2026, amid subdued buying activity in the physical market during the monsoon season.
According to BigMint’s assessment, P1020 aluminium ingot prices in Delhi NCR declined by INR 3,000/t (0.9%) w-o-w to INR 345,000/t on 31 July, from INR 348,000/t a week earlier.
How did Indian and global exchanges perform?
Domestic aluminium futures on the MCX declined by INR 310/t (0.1%) w-o-w to INR 342,640/t, from INR 342,950/t in the previous week.
Meanwhile, three-month aluminium prices on the LME fell by $14/t (0.4%) w-o-w to $3,174/t, from $3,188/t. At the same time, LME aluminium inventories decreased by 10,475 t (4%) to 266,300 t, reflecting continued tightness in exchange stocks.
Market updates
The domestic aluminium market remained under pressure during the week, tracking weaker MCX and LME prices despite a continued decline in LME inventories. Although global benchmark prices softened, the persistent drawdown in exchange stocks indicated tight metal availability, offering some support to domestic market fundamentals.
Demand remained subdued as the ongoing monsoon season continued to weigh on consumption across key end-user sectors. Most buyers restricted purchases to immediate requirements, with limited interest in inventory building amid uncertain global price trends.
Across Asia, aluminium premiums remained largely stable despite muted trading activity. Japanese buyers continued to procure only prompt cargoes while awaiting clarity on Q4 contract premiums. Elsewhere in Asia, buying interest remained weak, prompting sellers to lower offers amid expectations of additional primary aluminium supply from the Middle East and Indonesia. In India, domestic aluminium premiums were assessed at around LME+300-350/t, supported by relatively tight primary metal availability despite softer demand.
Meanwhile, downstream aluminium manufacturers urged the Ministry of Mines to reduce the effective 8.25% import duty on primary aluminium, arguing that the existing tariff structure has encouraged import-parity pricing by domestic producers, significantly increasing raw material costs. Industry associations stated that margins of downstream MSMEs have contracted by up to 70%, while higher global aluminium prices have increased input costs by 20-35% over the past three months. They also reiterated concerns over the inverted duty structure, under which several finished aluminium products continue to enter India at low or zero duty under various free trade agreements (FTAs).
In Western markets, European aluminium premiums remained under pressure due to ample replacement supply from Canada and Indonesia, coupled with seasonally weak demand. In contrast, US premiums were broadly stable, as slower summer consumption offset support from declining global inventories and ongoing geopolitical uncertainties.
Outlook
Domestic aluminium prices are expected to remain range-bound with a slightly weaker bias in the near term, as subdued monsoon-led demand and cautious buying continue to weigh on the market. However, tight primary metal availability and declining LME inventories are likely to provide underlying support, while post-monsoon demand recovery and trends in MCX and LME prices will remain key factors to watch.
Leave a Reply