Aluminium falls as EGA reaffirms output recovery timeline

LONDON: Aluminium prices fell on Wednesday after major producer Emirates Global Aluminium reaffirmed it would resume full-scale production at its war-damaged smelter in the first quarter of 2027, easing worries about future supply deficits.

Benchmark three-month aluminium on the London Metal Exchange was down 1.7 percent at USD3,308 a metric ton in official open-outcry trading. The metal had been rising for seven previous sessions, hitting a seven-week high of USD3,384.5 on Tuesday as worries over supply from the Gulf coincided with Norsk Hydro’s announcement of reduced feedstock production at its Brazilian plant.

Abu Dhabi-based EGA said its Al Taweelah smelter, which was damaged by an Iranian strike in March, was operating at 18 percent capacity.

As EGA organised export routes outside the Strait of Hormuz since March, its total sales fell by only 32 percent to 939,000 tons in the first half of 2026.

The physical premium European buyers pay above the LME price for primary aluminium — which covers freight, taxes and handling costs — has eased to USD487 a ton from a May peak of USD621, indicating that worries about the Gulf supply have gradually eased, although it is still up 36 percent since the war started.

In other LME metals, copper rose 0.3 percent to USD14,200 a ton in official activity, so far on track to close Wednesday at a fresh all-time high, as a temporary shutdown of a smelter in Indonesia and expectations of lower production in Chile added to worries about tight inventories after outflows to the US

The premium of the LME cash copper contract over the benchmark hit USD196 a ton, its highest since October, on Tuesday, signalling tightness for nearby supply ahead of the expiry of contracts next Wednesday.

In top metals consumer China, the Yangshan copper premium fell to its one-month low of USD96 a ton from a peak of USD115 a ton on July 22, indicating weaker demand from Chinese importers as high prices dented buying interest.

LME zinc climbed 1.4 percent to USD3,779, nickel added 0.4 percent to reach USD16,900, while lead and tin rose 0.6 percent to USD1,918 and USD56,250, respectively.