Aluminium near 3-year highs on supply strains

Aluminium futures in the UK climbed to about $3,190 per tonne, extending gains for a third session and hovering near a three-year high. In China, authorities reaffirmed efforts to curb overcapacity in metals to ease deflationary pressures, with output set to breach the 45-million-ton cap this year, forcing smelters to restrain growth in 2026. Attempts by Chinese firms to expand smelting in Indonesia faced setbacks from rising energy costs and regulatory risks.

Elsewhere, elevated power prices, equipment failures, bauxite shortages, and geopolitical strains triggered shutdowns in Iceland, Mozambique, and Australia. Demand remained resilient, driven by electric vehicles, renewables, and power grid investment, while exchange inventories stayed near multi-year lows, amplifying sensitivity to supply shocks and keeping aluminium prices firm.