Aluminium Price Fall

Aluminium prices fell around 3.50% in a day as expectations of resumed exports from the Persian Gulf improved market sentiment following reports of a US-Iran agreement to end hostilities and reopen the Strait of Hormuz. Lower oil prices eased inflation concerns and supported risk appetite across industrial metals. However, supply-side risks remain elevated as Gulf smelters continue to face operational disruptions, with EGA and ALBA still below normal production levels. Additional concerns stem from Guinea's tighter bauxite export restrictions and Norsk Hydro's force majeure declaration on Qatar aluminium. Meanwhile, Japanese aluminium inventories declined, while China's aluminium exports rose 5.68% in May, reflecting stronger export availability.

Aluminium Futures

Major Highlights

• Aluminium prices dropped around 3% in a single day.
• US-Iran agreement expected to reopen the Strait of Hormuz.
• Oil prices fell to a two-month low, reducing inflation concerns.
• China's aluminium exports increased 5.68% to 632,000 tonnes.
• Gulf aluminium output fell 26.7% m/m in April.
• Guinea's bauxite export restrictions continue to tighten raw material supply.
• Japanese port inventories declined to 238,900 tonnes in May.
• Norsk Hydro declared force majeure on Qatar aluminium.

Near-term aluminium prices may remain under pressure due to easing geopolitical tensions and expectations of improved Gulf exports. However, persistent supply disruptions, low inventories, and raw material constraints are likely to limit downside, suggesting prices could stabilize after the recent sharp decline.