Aluminium prices declined by 1.4 per cent to INR 320.25 (USD 3.37) as easing restrictions on passage through the Strait of Hormuz reduced concerns over supply disruptions in the Gulf region. According to Kedia Advisory, the decline also reflected expectations of recovering smelter operations, higher Indonesian production and rising Chinese exports.
The softer price outlook comes despite falling visible inventories, which continue to provide underlying support to the market. Aluminium exports from Indonesia exceeded 150,000 tonnes in August, while Chinese aluminium exports increased by 17.2 per cent year on year, adding to expectations of improved global availability.
According to Citi, accelerating supply growth outside China could shift the global aluminium market from a deficit of 941,000 tonnes in 2026 to a surplus of 1.8 million tonnes in 2027. Macquarie also lowered its forecast for the 2026 global market deficit to 820,000 tonnes, citing faster-than-expected restarts of Middle Eastern smelters.
Macquarie predicted average aluminium prices of USD 3,050 per tonne in 2027, compared with USD 3,325 per tonne in 2026.
The easing of passage restrictions through the Strait of Hormuz and the gradual recovery of smelter operations have improved expectations for aluminium supply from the Gulf. However, regional production remains under pressure.
Global aluminium production declined by 1.5 per cent year on year in August, while Chinese refined aluminium output rose by 3 per cent to a record 3.87 million tonnes. In contrast, production across the Gulf Cooperation Council (GCC) fell by 43 per cent year on year to 299,000 tonnes, highlighting the continuing impact of regional supply constraints.