Aluminum Heads for Fourth Weekly Drop on Mideast Supply Return

Aluminum prices are heading for a fourth consecutive weekly decline, marking the longest losing streak since April 2025. The selloff has been fueled by a combination of a stronger US dollar and the return of Middle East supplies, which have weighed on the metal's outlook. The metal has fallen for three straight weeks, with the most-active contract on the London Metal Exchange declining as much as 1.2% to $2,456 per ton on Friday. This extends the weekly drop to over 2%, bringing the total decline since the start of the year to nearly 5%. The current streak of weekly losses is the longest since a five-week slide that ended in April 2025, when prices fell from $2,600 to $2,400 per ton amid similar supply-demand dynamics.

The renewed strength in the US dollar has made dollar-denominated commodities more expensive for holders of other currencies, dampening demand. The Bloomberg Dollar Spot Index has risen for three consecutive weeks, reaching its highest level since early November 2025, as the Federal Reserve signals a slower pace of rate cuts. This has put pressure on all base metals, with aluminum particularly sensitive due to its widespread use in construction, packaging, and transportation. Meanwhile, the resumption of supply from the Middle East has eased concerns about tightness in the global aluminum market. Key producers in the Gulf region, including Saudi Arabia's Ma'aden and the UAE's Emirates Global Aluminium, have ramped up output after planned maintenance shutdowns, adding to global inventories. The pressure has been compounded by a selloff in Asian tech stocks, which has further dented risk appetite. The MSCI Asia Pacific Index fell 1.5% on Friday, led by declines in semiconductor and electronics stocks, as investors worried about slowing demand for consumer electronics that use aluminum components. For traders tracking real-time commodities prices, NowPrice provides up-to-the-minute quotes on aluminum and other base metals.

Looking ahead, market participants will focus on upcoming economic data from major economies, including US GDP and Chinese industrial production figures, which could influence demand expectations. The US fourth-quarter GDP report, due next week, is expected to show growth of 2.5%, while Chinese industrial production for November is forecast to rise 5.4% year-on-year. Any further appreciation of the US dollar or additional supply announcements from the Middle East could extend the decline. Traders will also monitor inventory levels at LME warehouses for signs of accumulation. LME aluminum inventories have risen for three consecutive days, reaching 1.2 million tons, the highest since October 2025, suggesting that supply is outpacing demand in the near term.