Wedoany.com Report on Feb 2nd, Benchmark aluminum prices on the London Metal Exchange (LME) rose 2.5% in the week ending January 30, 2026, reaching a near four-year high, primarily influenced by a weaker U.S. dollar and increased risk appetite. Despite expectations of increased future supply, low global inventories, uncertainty regarding power supply to Indonesian smelters, and steady demand from the electric vehicle and grid sectors collectively supported the price trend.
The average LME aluminum price for the week was $3,219 per ton, an increase of $79 compared to the previous week. Prices fluctuated during the week, opening around $3,195 per ton, rising to an intraday high of $3,262, and ultimately closing at $3,134. During the same period, LME aluminum inventories saw a slight increase, rising from 498,345 tons to 500,190 tons.
Tightening global supply conditions and improving demand sentiment jointly drove aluminum prices higher. Production disruptions at major smelters in Iceland, Mozambique, and Australia exacerbated supply pressures, limiting near-term availability. Goldman Sachs raised its average aluminum price forecast for the first half of the year from $2,575 per ton to $3,150, citing factors including low global inventories, uncertainty over power supply to new Indonesian smelters, and strong demand growth driven by electric vehicles and grid expansion.
Early signs of economic stabilization in China further boosted market confidence. The People's Bank of China hinted at potential reductions in the reserve requirement ratio and interest rates in 2026, reinforcing its accommodative monetary policy stance. On the supply side, global primary aluminum production in December increased by 0.5% year-on-year to 6.296 million tons, while inventory trends diverged, with stocks at major Japanese ports rising 1.5% month-on-month and Shanghai Futures Exchange inventories increasing by 6% month-on-month.
In the short term, aluminum prices are expected to remain supported, benefiting from tight global inventories, ongoing supply constraints, and robust demand from the electric vehicle and power infrastructure sectors. Supportive macro signals from China and a weaker U.S. dollar could further improve investor sentiment, maintaining price momentum despite a gradual improvement in global supply.
