- LME warehouse stocks rise 8% pressuring prices
- Alcoa reports $115 million Q2 tariff impact
London Metal Exchange (LME) aluminium prices slipped during week 29 (14-18 July 2025), weighed down by rising warehouse inventories and a cautious market mood ahead of key macroeconomic events. Global sentiment remained subdued amid ongoing trade tensions, new U.S. tariffs, and geopolitical risks.
Price performance and inventory trends
LME aluminium prices hovered around $2,580/t in Week 29, marking a slight 0.5% dip from Week 28 (7-11 July). Prices opened the week in the $2,580-2,590/t range but dipped midweek to $2,560-2,570/t. They recovered by the week’s close, rebounding to $2,590-2,600/t.
Meanwhile, aluminium stocks at LME-registered warehouses jumped 8%, rising from 388,460 t in Week 28 to 420,790 t in Week 29. This inventory build-up pressured prices, turning the cash-to-three-month spread into a discount–indicating abundant near-term supply.
What’s happening in China?
China’s aluminium production in June dipped 3.23% m-o-m but remained 3.4% higher y-o-y at 3.81 mnt. For the first half of 2025, output rose by 3.3% to 22.38 mnt, reflecting steady upstream momentum. However, export performance was less encouraging–shipments of unwrought aluminium and related products fell to 489,000 t in June from 547,000 t in May, with year-to-date exports down 5.1% y-o-y, underscoring weaker global demand.
On the inventory front, aluminium stocks on the Shanghai Futures Exchange rose 9.1% w-o-w, indicating sluggish downstream activity amid another contraction in the NBS Manufacturing PMI.
While Q2 GDP growth in China beat expectations and industrial output rose 6.8% y-o-y in June, structural shifts are emerging. Falling home prices and a policy pivot toward sustainable urban development may weigh on long-term aluminium demand, particularly from the construction sector.
Alcoa hit in Q2 as Trump’s aluminium tariffs drive up costs for U.S. buyers
Alcoa Corp., the largest U.S. aluminium producer, reported a $115 million hit in Q2 due to Trump’s tariffs on Canadian imports–nearly six times the $20 million impact in Q1. Following the tariff hike to 50% in June, Alcoa began diverting Canadian aluminium to other markets. CEO William Oplinger warned that the tariffs are raising costs for U.S. buyers and confirmed discussions with U.S. and Canadian officials, including Trump.
Japan’s aluminium demand grows in Q1 2025
Japan’s aluminium demand rose 1.4% y-o-y to 895,100 t in Q1 2025, driven by growth in the transport (+3%) and food (+5%) sectors. Construction demand dropped 3.3% due to weak housing starts. Imports of primary aluminium rose 0.3%, recycled alloyed aluminium 2.1%, and aluminium scrap 1.8%, reflecting steady market activity.
Looking ahead
LME aluminium prices are likely to stay rangebound with slight fluctuations in the short term, backed by strong inventory levels. However, recent volatility has made market participants cautious, prompting them to closely watch macroeconomic data and trade developments for future guidance.
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