- Overseas supply concerns keep aluminium resilient
- Hawkish Fed limits broader aluminium gains
Benchmark aluminium prices on the London Metal Exchange (LME) remained largely stable w-o-w, registering a marginal increase of 0.1% during the week ended May 22, 2026. Prices stayed firm amid tightening ex-China supply conditions, continued inventory drawdowns, and improving geopolitical sentiment, while stronger overseas fundamentals helped aluminium remain resilient despite hawkish signals from the US Federal Reserve.
Pricing, inventory trends
LME aluminium prices averaged around $3,612/t during the week, increasing by $3/t or 0.1% w-o-w from $3,609/t. Prices opened the week near $3,565/t, rose sharply to around $3,649/t during the week, and later eased to close near $3,642/t.
Meanwhile, LME aluminium inventories declined by 2.7% w-o-w to 340,155 t from 349,675 t, indicating continued drawdown in exchange stocks, which continued supporting the overall aluminium market sentiment.
Factors impacting prices
LME aluminium prices remained firm w-o-w as tightening ex-China supply conditions and continued inventory drawdowns outweighed macroeconomic headwinds. Overseas markets remained supported by concerns surrounding potential disruptions to trade flows and navigation through the Strait of Hormuz amid ongoing Middle East tensions, which strengthened bullish sentiment across the aluminium complex.
At the same time, LME aluminium inventories continued to decline, reflecting a persistent supply deficit outside China, while the deepening Cash-3M premium structure highlighted near-term tightness in physical metal availability.
On the macro front, market sentiment also improved after former US President Donald Trump stated that mediators were drafting a letter of intent between the US and Iran to formally end hostilities and initiate a 30-day negotiation process covering Iran’s nuclear programme and navigation through the Strait of Hormuz.
Although the release of the US Federal Reserve meeting minutes revealed a more hawkish-than-expected stance, strengthening the US dollar and limiting broader gains in base metals, LME aluminium remained resilient due to stronger support from tightening overseas fundamentals and persistent supply concerns.
Outlook
LME aluminium is expected to remain firm in the near term, supported by tight ex-China supply conditions, declining inventories, and persistent spot market tightness. Ongoing Middle East geopolitical developments may continue to influence sentiment. However, gains could be limited by the US Fed’s hawkish stance and a stronger dollar. Overall, prices are likely to fluctuate at elevated levels with a positive bias.
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