LME aluminium prices ease w-o-w after recent spike amid cautious buying

• Tight nearby availability limits sharper downside
  
  
• LME cash nears multi-year highs, triggering profit-booking
  
  

LME aluminium prices eased marginally w-o-w after the recent sharp rally, as profit-booking and cautious physical buying weighed on market sentiment. However, lower exchange inventories, tight nearby availability, and ongoing Middle East tensions limited sharper downside pressure. LME three-month aluminium prices settled at $3,670/t in the week ended 4 June 2026, downmarginally by 0.4% from $3,685/t in the previous week.

However, average LME aluminium prices during the week stood at around $3,691/t, up by $23/t or 0.6% w-o-w from $3,668/t, reflecting continued intraday volatility. Prices opened the week near $3,686/t, climbed to a weekly high of around $3,723/t amid supply-side concerns, before easing to around $3,663/t during mid-week profit-booking and finally settling near $3,670/t by the weekend.

Meanwhile, LME aluminium inventories declined marginally by 1.4% w-o-w to 333,200 t from 338,000 t, indicating continued tightness in visible exchange stocks.

Profit-booking cools aluminium rally

Market participants indicated that the recent rally in aluminium prices triggered active profit-booking during the week, particularly after LME cash aluminium prices approached multi-year highs. Buyers across regions turned cautious at elevated levels, resulting in subdued spot activity and largely need-based procurement.

At the same time, persistent geopolitical tensions in the Middle East continued to disrupt short-term market sentiment and freight visibility, preventing a sharper downside correction. Traders noted that concerns over possible supply-chain disruptions and higher energy-linked costs continued to support the broader aluminium complex.

In addition, market participants continued to monitor China's aluminium capacity ceiling policy, which remains a key long-term bullish factor for the market. Expectations of limited fresh smelting capacity additions in China, coupled with tightening global inventories, continued to support underlying market sentiment despite weaker short-term price direction.

Physical buying stays cautious

Physical market activity remained relatively subdued during the week as downstream consumers resisted elevated offers following the recent price surge. Buyers across Asia and Europe largely followed hand-to-mouth procurement strategies amid volatile price trends and uncertain short-term direction.

Demand from packaging, automotive, and electrical sectors remained relatively stable, although construction-linked downstream demand continued to remain moderate. Market participants also noted that volatile freight conditions and fluctuating currency movements kept regional buyers cautious.

Outlook

LME aluminium prices are expected to remain volatile, with price movements limited to a narrow range in the near term. While lower inventories and tight nearby availability may continue to cushion downside pressure, cautious physical buying and intermittent profit-booking are likely to cap significant upside movement.