Published on 6/30/2026
Aluminum is on track to record its largest monthly loss since the global financial crisis in 2008, after expectations of the return of supplies from the Middle East offset the gains achieved by the metal during the war between America and Iran, at a time when the strength of the dollar and Chinese exports increased pressure on prices, according to Bloomberg.
The agency stated that aluminum prices fell by more than 15% during the current June, heading towards recording the largest monthly loss since October 2008, after the temporary agreement between America and Iran strengthened expectations for the resumption of shipments through the Strait of Hormuz, which erased the gains recorded by the metal during the previous three months as a result of the disruption of supplies from a region that represents about 10% of global production.
The return of supply changes the direction of the market
Record Chinese exports and the continued flow of alumina shipments through the Strait of Hormuz have contributed to the rebuilding of inventories, accelerating the decline in prices and returning the market to a “contango” structure, where spot prices become lower than futures prices, in a sign of easing concerns about supply shortages.
Peng Dinggui, an analyst at Zhongtai Futures, said that price premiums outside China declined quickly after the announcement of the calming agreements, reflecting improved supply conditions.
He added: “The rapid decline in aluminum prices surprised many investors and caused a degree of panic in the market, while some Chinese investors expect the decline to continue.”
Bloomberg added that the strength of the US dollar since mid-May has increased pressure on industrial metals, as it raised the cost of purchases for consumers outside the United States, at a time when expectations of US interest rates remaining at high levels, or even being raised again, reinforced concerns about weak global demand.
Pressures extend to metal markets
By Tuesday trading:
- Aluminum on the London Metal Exchange rose 0.5% to $3,103 per ton, but remained down 15.4% since the beginning of June.
- Copper rose 0.4% to $13,332 per ton, despite falling 2.2% during the month, while iron ore fell 0.1% to $98.75 per ton in Singapore.
- Zinc rose 0.2% to $3,482 per ton after a report issued by the Beijing Antiec government research institution stated that major smelters in China intend to reduce their consumption of zinc concentrate by between 600,000 and one million tons this year to reduce losses.
However, Liu Xiaoyi, an analyst at Zijin Tianfeng Futures, said that this reduction will not be enough to end the surplus supply in the Chinese market, explaining that the expected reduction will reduce refined zinc production by about 200,000 to 300,000 tons, equivalent to about 4% of China’s total production during the past year, according to Bloomberg.
