LME Aluminium Futures Fall to $3,050/Tonne: Lowest Since February Amid Improving Supply Outlook
LME Aluminium Futures Fall to $3,050/Tonne: Lowest Since February Amid Improving Supply Outlook
Meta Description: LME aluminium prices dropped to their lowest level since February 2026 at around $3,060 per tonne. The decline is driven by Middle East smelter restarts, expanding Indonesian capacity, a strong US dollar and weaker Chinese demand expectations.
London Metal Exchange (LME) aluminium futures fell to around USD 3,060 per tonne on October 12, 2026, hitting their lowest level since February. The decline was driven by a stronger US dollar, easing concerns over Middle East supply disruptions and expanding Indonesian production capacity, while weaker demand expectations from China added further downward pressure.
Middle East Smelter Restarts Ease Supply Tightness
Faster-than-expected production recoveries at Middle Eastern aluminium smelters have triggered a reassessment of the global supply outlook. Macquarie recently lowered its forecast for the global aluminium supply deficit, as restarts across the region have progressed more quickly than anticipated.
In late August 2026, Emirates Global Aluminium (EGA) confirmed that a quarter of capacity at its Al Taweelah smelter in Abu Dhabi had resumed operations. The facility was damaged in an Iranian attack in March 2026, and recovery work has continued steadily since.
The gradual return of production capacity has eased the supply disruption concerns that supported aluminium prices earlier in the year. As more capacity comes back online, expectations for a tight market have softened materially.
Broader Supply Outlook Improves
Supply sentiment has also been bolstered by Rio Tinto’s agreement to keep its Bell Bay Aluminium smelter in Tasmania, Australia, operational through the end of 2031. The deal provides greater visibility over future output from the facility, adding to the market’s improving supply narrative.
Meanwhile, Indonesia’s expanding aluminium production base is adding another source of incremental supply growth, exerting additional downward pressure on prices as the market recalibrates the global supply-demand balance.
Strong Dollar & Weaker Chinese Demand Add Pressure
Currency dynamics remain a key headwind for aluminium pricing. The US dollar has held near an 18-month high, making dollar-denominated commodities more expensive for buyers using other currencies and weighing on overall market sentiment.
At the same time, softer demand expectations from China — the world’s largest consumer of aluminium — have reinforced the downward pressure on LME prices.
Looking ahead, aluminium prices face a challenging near-term outlook as supply recovery, capacity expansion and currency pressures converge. Market direction will hinge on the pace of production restarts in the Middle East, the volume of new capacity coming online, and whether demand expectations improve into year-end.
