COMEX aluminum futures crashed 8.91% in the June 26 session to $3,324.50/mt, marking the sharpest single-day decline since the contract’s launch. The move was disconnected from LME, where three-month aluminum rose 1.02% to $3,164/mt. The LME-COMEX spread has now inverted: COMEX aluminum trades at a $160/mt discount to LME for the first time in 2026.

The COMEX selloff appears driven by technical factors rather than fundamentals. Open interest in COMEX aluminum is thin compared to LME, making the contract susceptible to outsized moves on position unwinding. Market sources reported a large hedge fund liquidation of COMEX aluminum length on Friday, triggered by margin calls in copper positions.

LME aluminum’s stability at $3,164 reflects physical market tightness that the COMEX contract isn’t capturing. European delivery premiums remain elevated at $340-360/mt duty-paid, suggesting real-world supply constraints. LME cancelled warrants rose, and available inventory continues to contract.

SHFE aluminum was essentially flat at ¥24,560/mt, underscoring the Chinese market’s insulation from the COMEX turmoil. China’s aluminum production hit a record 3.65 million tonnes in May, up 4.2% year-on-year, keeping domestic prices contained despite the global volatility.

The broader aluminum trend remains bearish: LME is down 15.36% over 30 days, COMEX down 20.75%. The trigger was the EU’s June 15 decision to delay carbon border adjustment enforcement on aluminum until 2027, removing a near-term supply squeeze catalyst. Combined with slowing European manufacturing PMI at 47.8, demand concerns dominate.

What this means for buyers

The COMEX crash is likely a technical dislocation, not a fundamental signal. LME pricing and physical premiums are the better indicators for near-term procurement decisions. European buyers should note that physical premiums remain elevated despite the futures selloff — the all-in delivered price hasn’t fallen nearly as much. Consider using this COMEX dislocation to negotiate Q3 fixed-price contracts with suppliers who price off US Midwest premiums.