Aluminium prices saw a slight lift recently, closing up by 0.11% at Rs 329.80. The main spark came from a fast drop in warehouse stocks tied to the Shanghai Futures Exchange (SHFE), which slid 10.3% over the week to sit at 212,858 tonnes. Even with that drop, prices did not break out into a massive rally. A stronger US dollar and worries about an oversupplied global market by 2027 kept buyers cautious.
Smelter Restarts and Record Output in China
Smelter activity around the world is gradually coming back online. Emirates Global Aluminium has turned 631 of its 1,262 reduction pots back on at the Al Taweelah facility. That restores about 50% of its normal capacity, and the plant should run at full power by the first quarter of 2027.
Meanwhile, China continues to produce massive amounts of metal. Primary aluminium production in China rose 3.1% compared to last year, hitting 3.91 million tonnes in September alone. During the third quarter, Chinese output reached a record 11.84 million tonnes, up 2.2%. Taking the January to September window, China produced 35.03 million tonnes—a 3.8% jump year-on-year. This steady increase shows that local supply remains strong despite the country's official capacity limits.
Global Output Slows While Future Supply Builds
Looking at the wider picture, total global output showed some strain. Data from the International Aluminium Institute revealed that world primary aluminium output fell to 6.014 million tonnes in September, down from 6.10 million tonnes during the same month last year.
Still, expectations of extra volume from Southeast Asia and the Middle East are capping long-term price hopes. Indonesian exports topped 150,000 tonnes in August. At the same time, easier shipping conditions through the Strait of Hormuz mean Gulf smelters can export without major bottlenecks. Because of these factors, market analysts believe the global balance could swing into a surplus of over 1 million tonnes by 2027.
Physical demand signals also point to loosening supply. Japanese buyers settled fourth-quarter shipments at a premium of $255 per tonne, which is down 35% from the third quarter.
Technical Chart Levels to Watch
From a chart perspective, the market is seeing fresh long positions. Open interest ticked up by 0.16% to 4,478 contracts alongside a modest price gain of Rs 0.35.
For short-term traders, immediate support sits at Rs 328. A break below this mark could pull prices down toward Rs 326. On the upside, the market faces strong resistance at Rs 332. If buyers clear that level with good volume, prices could test Rs 334.
Key Takeaways for Aluminium Traders
- Short-Term Support: Dwindling warehouse inventories in Shanghai are giving local prices a temporary floor.
- Medium-Term Headwinds: Smelter restarts in the Gulf and high production rates in China make big rallies tough to sustain.
- Key Price Range: Watch Rs 328 on the downside and Rs 332 on the upside for the next directional break.