LME aluminium prices rise w-o-w despite easing geopolitical risk premiums

• Ceasefire eases supply risks, leads to modest cooling earlier in week
  
  
• Tight prompt supply lifts cash-to-3-month spread to multi-year highs
  
  

Benchmark aluminium prices on the London Metal Exchange (LME) increased by 1.7% in the week ended 10 April 2026, reflecting firm market sentiment supported by tightening prompt supply conditions and declining LME inventories.

Pricing, inventory trends

LME aluminium prices averaged around $3,454/t during the period, increasing by $58/t or 1.7% compared to the previous level of $3,396/t. Prices showed an upward trend, reaching $3,483/t on 10 April 2026 from $3,425/t on 02 April 2026.

Meanwhile, LME aluminium inventories declined by 3.1% to 399,150 t from 411,950 t, reflecting a continued drawdown in exchange stocks, which offered underlying support to prices during the period.

Factors impacting prices

Market sentiment was initially shaped by a ceasefire-driven pullback in geopolitical risk premiums, which led to a modest cooling in prices. However, the downside was limited as fundamentals remained firm, with low LME inventories, continued supply tightness, and structural disruptions in key Middle East producing regions keeping the market supported. Reports indicate that aluminium stocks on the LME continued to decline, reinforcing concerns over tightening physical availability and underpinning higher price levels during the period.

As the week progressed, prices regained strength, with the market reacting to tight prompt conditions and elevated cash-to-three-month spreads, which reached multi-year highs -- signalling strong near-term supply tightness. Continued disruptions in Middle East supply chains and steady drawdowns in LME inventories further reinforced bullish sentiment, even as rising inventories in China and broader macroeconomic uncertainty capped upside momentum.

Trading activity was also influenced by LME holiday closures on Good Friday and Easter Monday, which reduced trading days and liquidity. These closures, consistent with global financial market holiday calendars, compressed market activity into fewer sessions, often amplifying volatility and contributing to sharper price movements when trading resumed.

Overall, the week reflected a transition from geopolitically driven volatility to fundamentals-led strength, where easing conflict risk provided temporary relief, but tight supply conditions and low inventories continued to dominate price direction.

Outlook