Aluminium prices have surged to four-year highs on the London Metal Exchange (LME) and touched a record ₹375/kg in India. After the onset of the US–Iran war in early March, prices initially fell sharply due to panic selling and risk aversion. However, the market quickly recovered as supply concerns and strong demand reasserted themselves, pushing prices to all-time highs.
Globally, aluminium supply is under pressure, with major producers facing rising energy costs and stricter environmental regulations. Demand remains strong, particularly in Asia, where infrastructure projects and industrial expansion continue. The mismatch between supply and demand has widened, creating upward pressure on prices.
Warehouse stocks in both the LME and Shanghai have been declining, reflecting strong demand and limited supply. China remains the largest consumer of aluminium, accounting for more than half of global demand, driven by infrastructure projects and renewable energy initiatives.
For the rest of the year, aluminium prices are expected to remain elevated, supported by strong demand and constrained supply. Volatility will persist due to geopolitical risks, energy market fluctuations, and speculative activity.
