- Profit-booking pressures aluminium prices lower
- Falling inventories limit downside in aluminium market
Benchmark aluminium prices on the London Metal Exchange (LME) edged down by 0.33% w-o-w in the week ended 8 May 2026, reflecting cautious market sentiment amid continued inventory drawdowns and stable supply conditions
Pricing, inventory trends
LME aluminium prices averaged around $3,533/t during the week, declining by $50/t or 1.40% w-o-w from $3,583/t. Prices opened the week near $3,523/t, rose to around $3,563/t during the week, and later eased to close at $3,512/t.
Meanwhile, LME aluminium inventories declined by 2.45% w-o-w to 355,775 t from 364,725 t, indicating continued drawdown in exchange stocks, which continued to lend underlying support to the market.
Factors impacting prices
Market sentiment remained volatile during the week, with LME aluminium prices correcting after briefly sustaining above the $3,600/t level. Profit-booking at higher levels and cautious buying interest weighed on prices across contracts, although values continued to remain elevated amid underlying supply tightness.
The downside remained limited due to persistent geopolitical tensions in the Middle East and continued concerns over potential supply disruptions and logistical uncertainty from key producing regions, which kept overall market sentiment supported.
At the same time, LME inventories remained below the 400,000 t mark, highlighting continued drawdowns in exchange stocks and signaling tight physical availability. Firm cash values and tight nearby market conditions continued to provide underlying support despite intermittent corrections.
As the week progressed, softer nearby spreads and improving Chinese aluminium output and exports exerted some pressure on prices. However, the additional supply remained insufficient to offset tightness in other regions and ongoing supply-side concerns.
Overall, the market reflected a corrective yet fundamentally supported trend, where profit-booking capped sharper upside, while falling inventories, tight physical availability, and geopolitical risks continued to underpin aluminium prices.
Outlook
LME aluminium prices are expected to remain range-bound with a cautious bias in the near term, amid continued profit-booking, softer nearby spreads, and improving Chinese supply conditions. However, persistent inventory drawdowns, tight physical availability, and ongoing geopolitical uncertainties are likely to limit sharper downside and continue providing underlying support to the market
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