India: Domestic aluminium prices softens w-o-w despite tight supply signals

• Supply concerns arise as LPG shortages impact production
• Japan’s aluminium premium hits 11-year high at $350/t

Domestic aluminium prices in India declined w-o-w on 27 March 2026, tracking weakness in aluminium futures on the London Metal Exchange (LME) and Multi Commodity Exchange of India (MCX), amid softening demand and cautious market sentiment.

As per BigMint’s assessment, domestic aluminium P1020 ingot prices in Delhi NCR fell by INR 4,000/t, or around 1.2%, w-o-w to INR 338,000/t, compared to INR 342,000/t in the previous week. Similarly, Mumbai prices declined by INR 8,000/t, or about 2.3%, w-o-w to INR 335,000/t, from INR 343,000/t last week.

How did Indian and global exchanges perform?

Domestic aluminium futures on the MCX declined by INR 4,400/t, or around 1%, w-o-w to INR 333,600/t, reflecting cautious market sentiment amid subdued demand.

In the global market, 3-month aluminium prices on the LME remained unchanged at $3,280/t, showing stability after recent fluctuations. Meanwhile, stocks at LME-registered warehouses decreased by 5,975 tonnes, or 1.4%, w-o-w, with total inventories standing at 426,750 tonnes.

Also, Aluminium prices on the London Metal Exchange plunged over 8% on 19 March 2026, the sharpest drop since 2018, as the Iran conflict triggered a broad market sell-off. Weakening global economic sentiment, profit booking, and macro uncertainties weighed on prices, despite tight supply fundamentals and declining inventories, keeping the near-term outlook volatile.

Market insights

A major primary producer mentioned, domestic P1020 prices are at INR 338,000-340,000/t exw Delhi. Current India domestic premiums are holding at around $320-330/t above LME cash, with demand remaining healthy for now. However, supply-side concerns are beginning to surface, as LPG and propane shortages are likely to impact downstream production for end consumers. As a result, while underlying demand is strong, it is expected to soften slightly in the near term, largely dependent on gas availability.

Reflecting the recent market correction, NALCO reduced its primary aluminium ingot (P1020, 99.7%) prices by INR 9,600/t to INR 350,400/t on 24 March 2026 from INR 360,000/t on 19 March.

Meanwhile, BALCO’s prices eased to INR 373,250/t on 26 March from INR 378,500/t on 19 March, while Hindalco’s P1020 ingots rose slightly to INR 383,250/t from INR 380,250/t over the same period.

Additionally, Japan’s aluminium premium for Q2CY’26 hit an 11-year high of $350/t over LME prices due to Middle East supply risks and higher freight costs. Rising demand, especially from Asia, and tightening LME inventories amid geopolitical tensions pushed premiums and prices up by about 7% from January to March, reflecting ongoing global supply uncertainties.

Outlook

Looking ahead, domestic aluminium prices in India are expected to remain under mild pressure due to softening demand influenced by potential LPG and propane shortages impacting downstream production. While current premiums and demand remain healthy, cautious market sentiment and volatile global conditions–including geopolitical risks in the Middle East and tightening LME inventories–may continue to weigh on prices. Supply-side uncertainties and macroeconomic factors suggest near-term volatility, with prices likely to fluctuate as markets balance firm underlying demand against emerging cost and supply challenges.