Global Economy
Aluminium Futures Surge to Two-Month High Amid Supply Tightening
Aluminium futures jumped to $3,380 per tonne in August, their highest level in almost two months, as major producers grapple with gas shortages and geopolitical disruptions. The slowdown in Chinese demand keeps prices below this year’s peaks, but the tightening supply chain suggests a short‑term bullish bias for the metal.
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Aluminium futures rose to $3,380 per tonne in August, marking the highest price level in almost two months. The rally is being driven primarily by supply‑side constraints affecting the world’s biggest non‑Chinese aluminium producers.
Supply constraints
- Alunorte, the largest alumina refinery outside China, announced a 50% cut in output after a shortage of natural gas from its supplier. The reduction has amplified the production challenges already faced by Norsk Hydro.
- Norsk Hydro reported two force‑majeure incidents after its Qatalum joint‑venture in Qatar halted production. The plant suffered from natural‑gas shortages caused by damage to energy and metallurgical infrastructure across the Middle East.
- Since the Iran‑U.S. conflict escalated in March, aluminium supplies from the Persian Gulf have been erratic due to destroyed industrial sites and blocked export routes. The region previously accounted for roughly 10% of global aluminium output.
Demand side
Despite the tightening supply, futures remain below the year‑to‑date highs because Chinese aluminium demand has softened, tempering price gains.
Market outlook
Analysts expect the supply pressures to keep the market on a modest upward trajectory in the short term, while the Chinese demand slowdown may prevent prices from reaching the peaks seen earlier in the year.