FX.co ★ Aluminum at Over 3-Week High

Aluminum futures in the UK traded around $3,310 per tonne, a more than three-week high, as persistent supply tightness and falling inventories continued to support prices. The latest escalation in US–Iran tensions has renewed uncertainty over the potential resumption of aluminum shipments from the Gulf.

Adding to supply concerns, Brazil’s Alunorte plant— the world’s largest alumina refinery outside China—reduced output to 50% of capacity last month due to a natural gas shortage from its key supplier, intensifying challenges for its main customer, Norsk Hydro.

On the inventory side, LME stocks remained close to a 36‑year low, while SHFE inventories declined a further 3% from the previous week, highlighting the tightness in the physical market. Some of this pressure may be alleviated in the coming months by planned capacity restarts and expansion projects across several producers. Higher Chinese exports could also help ease global constraints, with shipments from the world’s largest producer rising 18.7% year-on-year in July.