Aluminum is on track for its sharpest monthly decline since 2008, with prices heading for a fourth consecutive weekly drop, marking its longest losing streak since April 2025. This downturn is largely attributed to a renewed selloff in Asian tech stocks, a strengthening US dollar, and the return of Middle East supplies to the market.
The light metal is expected to lose approximately 7% this week. This decline is fueled by an interim peace deal between the US and Iran, which has sparked expectations of renewed shipments from the Middle East. This region typically accounts for nearly 10% of global aluminum production, but the recent conflict had forced the closure of local smelters and disrupted the flow of metal and raw materials through the Persian Gulf.
While the market saw some initial fears of widespread smelter shutdowns and prices exceeding $4,000 a ton due to the war and potential closure of the Strait of Hormuz, these scenarios have been averted. Ingenuity from producers in the Middle East and China, including complex logistical operations like "dark transits" through the Strait of Hormuz, has helped replenish raw material reserves. Chinese and Indonesian smelters have also played a crucial role in stabilizing the global market as buyers await the full rebound of Middle Eastern exports. JPMorgan Chase has even trimmed its price forecasts, noting that a move to $4,000 a ton is taking longer than expected due to strong supply responses and a drawdown in hidden inventories. Futures in London are currently trading around $3,400.
