Tight supply, China support lift LME aluminium prices w-o-w to 4-month high

• Traders optimistic amid US-China trade talks
  
  
• Japan port stocks fall, tightening Asian supply
  
  

London Metal Exchange (LME) aluminium prices gained during Week 30 of CY'25 (21-25 July 2025), hitting a four-month high. Aluminium prices found support from an improving demand outlook in China and tightening global supply. Market sentiment strengthened as traders tracked progress in US-China trade talks, which could boost industrial metal demand.

Confidence also rose after Beijing pledged to stabilise industrial growth, unveiling a CNY 1.2 trillion hydroelectric dam project to sustain infrastructure-led economic momentum.

Price performance, inventory trends

LME aluminium prices hovered around $2,650/t in Week 30, marking a 2.6% increase from Week 29 (14-18 July). Prices opened the week in the $2,640-2,650/t range but inched up further, reaching $2,660/t towards the closing of the week.

Despite the rise in LME tags, aluminium stocks at registered warehouses jumped 5%,to 443,320 t in Week 30 from 420,790 t in Week 29.

What's happening on the supply side?

Supply-side constraints in the aluminium market remain pronounced. Sanctions on key Russian producers have reduced availability for European manufacturers. According to the International Aluminium Institute, global primary aluminium output in June rose just 0.9% y-o-y to 6.045 mnt.

In China, output declined 3.23% m-o-m in June, and despite a 3.4% y-o-y increase, exports dropped to 489,000 t from 547,000 t in May.

Meanwhile, aluminium inventories at Japan's three main ports fell 4.3% in June to 316,700 t, tightening regional supply further.

Looking ahead

LME aluminium prices are likely to stay range-bound with slight fluctuations in the short term, despite being backed by strong inventory levels. However, recent volatility has made market participants cautious, prompting them to closely watch macroeconomic data and trade developments for future guidance.