Aluminum Hits A Seven-Week High As Stockpiles Thin
Aluminum | 2026-08-11 05:19:58 | By Paul Ploumis
On the London Metal Exchange (LME), three-month aluminum traded around $3,323 a metric ton after touching $3,336.50, its highest since June 23rd. ING, a Dutch bank, said fundamentals still look supportive and the market is expected to run a supply deficit this year, meaning demand outstrips supply.
SEATTLE (Scrap Monster): Aluminum prices just logged a sixth straight daily gain, hitting a near seven-week high as exchange stockpiles keep shrinking. Copper’s tight supply picture is adding to the bullish mood across industrial metals.
What does this mean?
On the London Metal Exchange (LME), three-month aluminum traded around $3,323 a metric ton after touching $3,336.50, its highest since June 23rd. ING, a Dutch bank, said fundamentals still look supportive and the market is expected to run a supply deficit this year, meaning demand outstrips supply.
That squeeze is most visible in inventories that traders can actually access. LME “on-warrant” aluminum stockpiles (metal available for delivery) fell to 244,650 tons, the lowest since April 2025. China’s Shanghai Futures Exchange also reported another 13,000-ton weekly draw. And Reuters flagged how little exchange metal is sitting in the US: COMEX, a US futures exchange, had just 5 tons registered in Owensboro, Kentucky.
Copper is telling the same story, but through pricing. It held above $14,000 a ton, with the LME cash price around $14,170.50. More importantly, the market is in steep “backwardation”, where near-term prices are higher than later delivery: copper’s cash-to-three-month spread hit $171 a ton, the highest since October 2025. That structure usually shows buyers are willing to pay up for immediate supply.
Why should I care?
For markets: Copper’s $171 cash-to-three-month spread shows the premium on “right now” metal.
When visible inventories get this thin, the market signal isn’t just higher three-month prices: it’s stress at the front end of the curve. Backwardation creates “negative carry”, meaning it can cost money to hold metal in storage and hedge it, because spot prices sit above forward prices. That pushes merchants to deliver metal now rather than stash it.
The result is often choppier day-to-day pricing and sudden moves in LME spreads, which matters most to physical buyers, traders, and smelters managing near-term supply, not just investors watching the headline price.
Courtesy: www.finimize.com