Aluminium squeeze deepens as near-term premium hits five-month high

Tight inventories are creating fresh stress in the aluminium market, with the premium for near-term London Metal Exchange contracts reaching its highest level in five months.

The cash-to-three-month aluminium premium hit US$94 a tonne, reflecting growing demand for immediately available metal.

Available aluminium stocks in LME warehouses have fallen 51% since late February to around 207,525 tonnes, their lowest level since March 2025.

Inventories monitored by the Shanghai Futures Exchange also fell 31% last week.

The squeeze comes despite a more cautious longer-term outlook, with analysts expecting the market to swing back into surplus next year as Middle Eastern production recovers and Indonesian output increases.

For now, however, tight physical supply is keeping nearby prices elevated.

That matters for Australian miners and industrial users because aluminium remains critical to construction, transport, renewable energy and electricity infrastructure.