Aluminium climbs for 6th straight session as inventory draw continues

Aluminium prices surged for a sixth consecutive day on Monday, reaching their highest level in nearly seven weeks, as warehouses of the metal continue to be depleted. The benchmark three-month aluminium on the London Metal Exchange climbed 1.2% to $3,320 per metric ton in official open outcry activity, with the price briefly hitting $3,336.50, the highest since June 23.

ING commodities strategist Ewa Manthey attributed the recent rally to the strong performance of copper, which hit a six-month high last week, boosting broader bullish sentiment across industrial metals. Manthey noted that aluminium's fundamentals remain supportive, with exchange inventories still low and a market expectation of a deficit this year.

China's demand for aluminium showed a 13,000-ton draw on the Shanghai Futures Exchange last week. Despite weak end-user demand in the first half of the year, further downside risks appear limited, according to Citi in a recent note. The low inventory levels make the market increasingly susceptible to changes in underlying physical demand and expectations.

Unlike copper, aluminium does not have a substantial exchange inventory cushion in the U.S., with only 5 tons located in Owensboro, Kentucky, on the COMEX. President Donald Trump announced a $3 billion investment in critical minerals and battery projects to enhance domestic production and bolster national security and industrial policy. Copper prices gained 0.5% to $14,150 a ton, while aluminium prices climbed further.