Aluminium has risen about 10% since early March, linked to supply worries around the Iran conflict and the Gulf’s role as a producer. Prices are near USD 3,500 per tonne, about 10% below the spring 2022 record high.
Chinese aluminium output is in focus because China is the largest producer and has reached its annual production cap. Markets will watch Chinese data and upcoming International Aluminium Institute figures for signs of output growth elsewhere.
Physical supply looks tight in Asia, with rising regional premiums. Requests to withdraw aluminium from LME warehouses reached their highest level since spring 2024, mainly aimed at warehouses in Malaysia.
In Japan, premiums for aluminium buyers have risen to their highest level in more than 10 years. In the US, the physical premium is at a record high alongside elevated prices.
China could raise exports in the short term due to attractive prices, which may ease supply strain. The report notes that the article was produced with an AI tool and checked by an editor.
We are seeing significant upward pressure on aluminum, with prices gaining about 10% since early March due to supply fears stemming from the Iran conflict. LME Aluminium has rallied from near $3,180 per ton at the end of February to over $3,500 now, approaching the record highs from the spring of 2022. Derivative traders should consider call options or long futures to ride this immediate bullish momentum, but remain aware of the high volatility.
The physical market is showing clear signs of strain, which justifies the current bullishness. The amount of metal being requested for withdrawal from LME warehouses has hit its highest point since we saw similar tightness back in spring 2024, with total registered stocks falling below 400,000 tons. The surge in Japanese physical premiums to over $250 per ton, a level not seen in years, suggests end-users are scrambling for supply and supports strategies that bet on continued price strength.
China’s role is the critical variable, as government-mandated production caps appear to have been reached, limiting new domestic supply. While last year, in 2025, we saw their exports fluctuate, the current high prices offer a strong incentive to sell inventory abroad. We must closely watch for any announcements on export quotas or official production figures, as a surprise increase could quickly reverse recent gains.
This high degree of uncertainty means we should expect significant volatility in the coming weeks. Implied volatility on near-term aluminum options has surged past 35%, reflecting the market’s tension ahead of key data releases. The upcoming production figures from the International Aluminium Institute will be a major catalyst, either confirming a global supply deficit or signaling that producers elsewhere are ramping up to meet the high prices.
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