Aluminium Prices Firm Despite Global Trade Tensions; Supply Tightens in Asia

Key Takeaways

• Price Movement: LME and MCX opened higher today, but prices remain under pressure from rising global output.
• Trade Tensions Impact: U.S. aluminium tariffs raised to 25%, but India remains resilient as U.S. is a minor export market.
• Inventory Trends: Stockpiles fell 1.5% in China and 1.2% in Japan, signaling short-term supply tightening.
• Production Surge: Global primary aluminium output rose 2.3% YoY; China’s Q1 output is nearing its 45 Mt annual cap.
• Analyst View: Market under long liquidation; key support at Rs 227.65, resistance at Rs 233.5–235.1 range.

Aluminium Price:

• As of last day, LME closed at $2348.9 /ton. Today, LME opened at $ 2373.6/ton. 
• As of last day, MCX closed at Rs 228.75/Kg. Today, the market opened at Rs 229.40/Kg.  

Aluminium Demand & Supply

• Aluminium prices slipped by 0.22% yesterday, closing at 228.75, as ongoing global trade tensions continued to dampen market sentiment. U.S. Treasury Secretary Scott Bessent defended President Trump’s aggressive 145% tariffs, claiming they would bring long-term advantages through related tax reforms. However, the near-term effects have been negative, with the U.S. economy shrinking in the first quarter for the first time in three years, largely due to importers accelerating shipments in anticipation of higher tariffs.
• On the diplomatic front, China’s Commerce Ministry stated it is reviewing a U.S. proposal to resume trade negotiations, offering a faint hope for progress. Market fundamentals remain uncertain. Aluminium inventories at the Shanghai Futures Exchange dropped 1.5% from the previous week, suggesting a tightening supply in China.
• Similarly, stockpiles at major Japanese ports fell 1.2% in March. However, increasing production continues to exert downward pressure on prices.
• Global primary aluminium output climbed 2.3% year-over-year in March to 6.227 million tonnes, while China’s Q1 production rose 2.6% to 11.07 million tonnes, approaching its annual cap of 45 million tonnes.
• Meanwhile, Chinese aluminium exports surged 17% in the first ten months of the year, indicating strong international demand.

Aluminium News

• Indian primary aluminium producers are expected to maintain strong profitability this fiscal year, despite global trade challenges such as the recent U.S. tariff hike on aluminium imports, according to a Crisil Ratings report.
• The United States increased aluminium import duties to 25% for all countries, raising India’s tariff from 2.55% to 25%. However, the direct impact on India’s aluminium exports has been minimal, as the U.S. makes up less than 5% of India’s total aluminium export market, thereby softening the effect of the tariff hike.

Expert Opinion

• The market is currently experiencing long liquidation, indicated by a 0.46% decrease in open interest to 5,181, alongside a 0.5% dip in aluminium prices. The metal is finding support at 227.65, with the possibility of declining further to 225.2.
• On the upside, resistance is seen at 233.5, and if prices break above this level, they could advance toward 235.1.