Commodity Weekly Insights 12 May 2026 by Geojit Investments Ltd
LME aluminium hit a four-year high in mid-April, maintaining their upward trajectory since the start of the year, as the market remained firmly supported by supply disruptions in the Middle East, a key hub for global aluminium production, alongside resilient demand from China and tightening global supply.
* LME aluminium futures climbed to a four-year high of USD 3,672 per tonne in mid-April before easing back, and are currently trading around USD 3,563 per tonne, still reflecting an overall upward trend in 2026.
* In MCX, aluminium futures tested an all time high of Rs.380 per kilo supported by strong global cues.
* China’s aluminium exports rose 15% year-on-year in April to 598,000 metric tonnes.
* The share of Indian aluminium rose to 27% in April from 7% in March.
* Emirates Global Aluminium said fully restoring primary aluminium production at its Al Taweelah smelter in the UAE that was hit by an Iranian attack late last month could take up to a year.
• The U.S. proposed restarting talks last week, but Iran called for a broader ceasefire and safe Strait of Hormuz shipping; Trump rejected the response, leaving peace talks stalled.
• Global equities largely traded on mixed note last week.
• The U.S. dollar weakened against a basket of six major currencies and hovered below 98 marks.
• Euro, Japanese yen and Chinese yuan edged up against USD last week.
• Indian rupee tested an all time low against the USD this week.
• China’s producer prices rose 2.8% yoy in April, while consumer inflation rose 1.2% yoy.
LME Aluminium surged to 4-year high
Aluminium prices surged to record levels, with LME benchmarks hitting a fouryear high of USD 3,672 in mid-April, driven by major supply disruptions and logistical challenges linked to geopolitical tensions. The blockade in the Strait of Hormuz has intensified concerns over a global supply shortfall, pushing regional premiums sharply higher across key markets. The aluminium market recorded an implied deficit of 314,726 tonnes in the first two months of the year, before the closure of Hormuz. Meanwhile, available (on-warrant) aluminium inventories on the LME rose 23% in April to 332,600 metric tonnes after a steep decline in March. Around 90,000 tonnes were returned to warrant, offering slight relief to the tight market conditions caused by Middle East tensions
Stronger-than-expected inflation data from China also supported sentiment in the base metals complex. Producer prices rose 2.8% year-on-year in April, the fastest pace in over three years, while consumer inflation increased 1.2%, driven by higher commodity costs linked to the Iran conflict. Additionally, aluminium demand has strengthened due to growing consumption from green energy sectors and data centres, keeping overall demand firm.
China’s aluminium exports rose 15% year-on-year in April to 598,000 metric tonnes, driven by tighter global supply and higher overseas prices following the Strait of Hormuz closure. Year-to-date shipments reached 2.05 million tonnes, up 8.9% from the same period last year
The share of available Russian-origin aluminium in LME warehouses declined to 72% in April from 92% in March, as Indian aluminium was reintroduced onto warrant. Consequently, the share of Indian aluminium rose to 27% from 7% over the same period. In absolute terms, Russian stocks fell by 6,350 tonnes to 241,125 tonnes, while Indian inventories surged by 69,325 tonnes to 89,200 tonnes. Despite Russian aluminium produced before April 13, 2024, remaining eligible for trading, many traders continue to avoid it. Metal produced after that date has been barred from the LME warehouse system in line with Western sanctions. Meanwhile, Indonesian aluminium accounted for a small share, with 2,275 tonnes representing about 1% of total LME stocks at the end of April.
Warehouse stock level
Aluminium inventories in LME registered warehouses declined by 9375 MT and totalled 353350 MT in the last week. At the same time, the inventory level in SHFE registered warehouses increased by 9477 MT and totalled 492728 MT.
Shanghai Futures Exchange: Mild positive trades expected in the counter. A break below CNY 24,000/MT could trigger a downward move, while sustained trading above CNY 25,400/MT may accelerate upward momentum
MCX: A bullish MACD divergence signals potential upside, though the RSI in overbought territory suggests a risk of a liquidation move. Sustained trading above Rs. 350/kg would support the uptrend, while a drop below this level could trigger downside pressure.
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