LME Aluminum Stocks Fall to 36-Year Low Amid Smelter Restart and Manufacturing Strength

Aluminum markets tightened further in early September as stockpiles on the London Metal Exchange slid to their lowest levels since 1990, even as signs of improving supply emerged with the gradual restart of a major smelter in the UAE.

LME Stocks Near Four-Decade Low

According to the LME’s weekly review for the period ending September 4, total aluminum inventories fell by roughly 2,200 metric tonnes in the week to reach 244,525 tonnes—levels not seen in more than 36 years. Operational stock declined to 242,200 tonnes, while exchange warrant cancellations slipped, indicating limited physical settlement activity. Three-month LME aluminum prices gained 1.6% over the week, supported by a strong manufacturing outlook and market tightness.

Supply Outlook Improving, Smelter Restart Underway

Emirates Global Aluminium (EGA) is steadily bringing its Al Taweelah smelter back online. Renewed logistics in the Gulf region and the smelter ramp-up are helping soothe supply concerns that had previously buoyed aluminum prices. However, market stress remains elevated due to the historically low stock levels.

Manufacturing Momentum Bolsters Demand Narrative

Global manufacturing indicators provided additional support for aluminum prices. Surveys showed expansion in key regions—including China’s private sector, the Eurozone, and the United States—reinforcing demand expectations. Elevated activity should underpin aluminum usage, particularly in industrial and infrastructure sectors.

What This Means for Markets

LME aluminum’s sharp inventory contraction marks a rare bout of structural tightness. Even with the Al Taweelah smelter restarting, supply improvements may be gradual. If stock replenishment lags growing demand, market pressure may persist. Investors and consumers alike should monitor LME warehouse levels and EGA’s restart trajectory closely for signs of relief—or further strain.

Verified price reference: LME 3-month aluminum settled at $3,293.50/tonne in the week ending September 4, reflecting a 1.6% weekly gain.