LME aluminium prices edge higher w-o-w amid persistent supply tightness

• Profit booking after multi-year highs leads to brief price correction
  
  
• Tight physical supply and low stocks sustain elevated price levels
  
  

Benchmark aluminium prices on the London Metal Exchange (LME) increased by 1.71% in the week ended 17 April 2026, reflecting firm market sentiment supported by relatively stable supply conditions despite a rise in inventories.

Pricing, inventory trends

LME aluminium prices averaged around $3,594/t during the week, increasing by $126/t or 3.6% w-o-w from $3,468/t. Prices opened the week near $3,571/t, eased to around $3566/t mid-week, and closed at $3632/t.

Meanwhile, LME aluminium inventories declined by 2.08% w-o-w to 388,850 t from 397,100 t, indicating a continued drawdown in exchange stocks, which provided underlying support to prices.

Factors impacting prices

Market sentiment remained volatile during the week, initially reacting to a pullback after aluminium prices approached recent highs near $3,630/t, as profit-booking and easing immediate concerns around supply disruptions triggered a brief correction. However, prices continued to hold above the $3,600/t mark, indicating underlying strength in the market.

The downside remained limited as fundamentals stayed supportive, with persistent concerns over supply disruptions in the Middle East, particularly around the Strait of Hormuz, continuing to influence market direction. Ongoing geopolitical tensions raised fears of logistical bottlenecks and constrained exports from key producing regions, reinforcing tightness in the global supply chain.

At the same time, LME inventories remained below the 400,000 t threshold, highlighting continued drawdowns in exchange stocks and signalling tight physical availability. This, coupled with elevated cash premiums and tight prompt conditions, pointed to strong near-term demand-supply imbalance, supporting prices despite intermittent corrections.

As the week progressed, prices regained momentum, supported by renewed buying interest and tight nearby spreads, which reflected persistent supply-side constraints. Additionally, rising aluminium exports from China and increased output offered partial relief, but were insufficient to offset disruptions in other regions, keeping the overall market tight.

On the macro front, broader economic uncertainty and fluctuations in financial markets capped sharper upside, while holiday-thinned trading sessions and reduced liquidity contributed to heightened volatility during the period.

Overall, the market reflected a transition from event-driven spikes to structurally supported pricing, where temporary corrections were absorbed quickly, and tight supply conditions, low inventories, and geopolitical risks continued to underpin aluminium prices at elevated levels.

Outlook

LME aluminium prices are expected to remain firm in the near term, supported by tight supply conditions, low inventories, and elevated prompt premiums. While some correction may persist after recent highs, downside is likely to be limited, with the market maintaining a positive bias amid ongoing supply-side risks.