LME aluminum held steady at $3,608/mt as the supply normalization following the Hormuz Strait disruption continues at a measured pace. The cash-to-3M backwardation compressed to $18/t from the peak of $45/t in late May, indicating that the immediate physical tightness is easing.
Gulf-region smelters that declared force majeure during the Hormuz crisis have resumed partial operations, with the largest producer reporting 60% capacity utilization. Industry estimates place total lost output at approximately 180,000 tonnes, with recovery expected by late July.
SHFE aluminum edged 0.36% lower to 24,855 CNY/mt, reflecting adequate domestic supply. China’s capacity cap policy continues to limit production growth, but domestic demand is moderating as the construction sector enters a seasonal slowdown.
LME registered aluminum stocks stood at 485,000 tonnes, essentially unchanged over the past week. The stability suggests that the physical market is finding a new equilibrium after the disruption-driven volatility of May.
With backwardation compressing and supply normalizing, buyers should use the current level to secure July-August requirements. The $3,500-3,600 zone offers acceptable value. European premium quotes are declining; push for P1020 AIP discounts in Q3 contract negotiations.