Destocking and Mixed Pricing Signals
Key Questions
What does the confirmed inflection in aluminium markets indicate?
The inflection point is marked by SHFE prices near averages and falling stocks, signaling a shift in supply-demand dynamics. Export-driven operating rates have risen to 64.4%.
Why did LME aluminium prices reach $3720/t?
Prices hit this level amid deepening supply shortages and declining inventories. LME opening stocks slipped further, reflecting tightening market conditions.
What are the mixed pricing signals on the LME?
Cash and offer prices edged higher while 3-month and longer-dated futures declined. This divergence occurs alongside falling stocks and points to near-term tightness.
How severe is the forecasted aluminium supply shock?
Citi warns of one of the most severe supply shocks in modern times, projecting prices to average $4000 per tonne in H2 2026. The outlook reflects persistent shortages and low inventories.
What is driving the recent destocking trend?
Destocking is confirmed by falling LME stocks and mixed futures pricing. Export operating rates climbing to 64.4% are contributing to the inventory drawdown.
Inflection confirmed; SHFE near averages, LME cash edges up/futures drop, stocks fall. Export-driven operating rate up to 64.4%.