Aluminium Falls As China’s Primary Output Hits Record High In The Third Quarter
Aluminium closed about 0.44% down at Rs 324.95. Traders are nervous because the world could see more supply and China just smashed its own production record, so the price slipped even though stocks at the exchanges fell and the metal is still hard to get on the ground.
China pumped out a record 11.84 million tonnes of primary aluminium in Q3, up 2.2% from a year ago and 0.5% higher than the previous quarter. September alone saw a 3.1% jump YoY to 3.91 million tonnes, and the total from January to September rose 3.8% to 35.03 million tonnes, helped by healthy smelting margins, cheap raw material costs and plants running at high rates.
Even so, stockpiles at the Shanghai Futures Exchange fell 11% since last Friday, and the London Metal Exchange’s opening inventory dropped to 238,375 tonnes – the lowest we’ve seen in the 21st century – which is a bit of a cushion for spot prices.
Looking ahead, the global aluminium market is likely to swing into a surplus of more than a million tonnes by 2027. New smelters are coming on‑line in Indonesia and output in the Gulf is slowly climbing as shipping lanes through the Strait of Hormuz open up again. Outside China, about 6 million tonnes of fresh smelting capacity is slated for addition between 2026 and 2028, most of it tied to Chinese‑backed projects.
Indonesia shipped over 150,000 tonnes of aluminium in August, while China’s exports grew 17.2% YoY, adding extra supply to the market. Japanese buyers are still willing to pay a premium of $255 per tonne for shipments from October to December, though that premium is 35% lower than the previous quarter, reflecting a softer supply outlook.
World primary aluminium output was 6.014 million tonnes in September 2026, a touch below the 6.10 million tonnes logged a year earlier, even though daily production ticked up a little month‑on‑month. Ongoing hiccups in Gulf production keep some price support alive, but China’s rising output and the upcoming capacity adds will probably keep recovery in check.
On the technical side, the market is in a long unwind. Open interest dropped 2.55% to 3,751 contracts while the price fell Rs 1.45. Immediate support sits around Rs 323, then Rs 321.50. Resistance is near Rs 327, and a break above could push the price toward Rs 328.50.
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Conclusion for Businesses and Traders
With Chinese aluminium output at a record high and new smelters on the horizon, prices are under pressure and the market may head into a surplus by 2027. Companies that rely on aluminium should watch inventory levels and consider locking in supplies now before the excess pushes prices lower.