Aluminium futures fall to $3,050/t, hits lowest level since February as supply outlook improves

Aluminium futures in the UK fell to around USD 3,060 per tonne on October 12, 2026, reaching their lowest level since February, as a stronger US dollar, easing concerns over Middle East supply disruptions and expanding Indonesian production weighed on prices.

The decline reflects a shift in market sentiment as the prospect of additional supply improves, while weaker demand expectations in China add pressure to London Metal Exchange (LME) aluminium prices.

Middle East smelter restarts ease supply concerns

The faster-than-expected recovery of aluminium smelters in the Middle East has prompted a reassessment of the global supply outlook. Macquarie recently lowered its forecast for the global aluminium supply deficit as smelter restarts in the region progressed more quickly than anticipated.

In late August 2026, Emirates Global Aluminium (EGA) reported that a quarter of its Al Taweelah smelter in Abu Dhabi had resumed operations. Recovery efforts continued following damage caused by an Iranian attack in March.

The gradual restoration of production capacity is helping ease concerns over supply disruptions that had supported aluminium prices earlier in the year. As more capacity returns to operation, expectations of tighter market conditions have weakened. If you are willing to explore the production, demand and consumption forecasts of bauxite and alumina, browse through our latest updated report: "Global Bauxite & Alumina Market Forecast to 2036: Supply–Demand, Trade Flows & Price Outlook"

Rio Tinto secures Bell Bay smelter's future

Supply expectations have also been influenced by Rio Tinto's agreement to keep its Bell Bay Aluminium smelter in Tasmania, Australia, operational through the end of 2031.

The agreement provides greater visibility over future production from the facility, adding to the market's improving supply outlook.

Meanwhile, Indonesia's expanding aluminium production capacity is adding another source of potential supply growth, putting further pressure on prices as the market reassesses the balance between production and consumption.

Strong US dollar and weaker Chinese demand weigh on prices

Currency movements are another headwind for aluminium. The US dollar remained near an 18-month high, making dollar-denominated commodities more expensive for buyers using other currencies and weighing on market sentiment.

At the same time, weaker demand expectations in China, a key player in the global aluminium market, have added to the downward pressure on LME prices.

With supply recovery in the Middle East, capacity expansion in Indonesia and currency-related pressures converging, aluminium prices face a challenging near-term outlook. Market direction will depend on how quickly disrupted production returns, how much new capacity enters the market and whether demand expectations improve.

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