Amag Aluminium Earnings Fall as Tariffs and Weak Automotive Demand Pressure Margins

Amag Aluminium

Amag aluminium earnings fell in 2025 as weaker shipments, US trade tariffs, and soft European automotive demand weighed on performance. The Austrian downstream aluminium producer reported a 23.5pc decline in Ebitda to €137mn, despite a modest increase in revenue.

Revenues rose by 2.1pc to €1.48bn, supported by higher London Metal Exchange aluminium prices. However, total shipments fell by 1.7pc to 417,600t, while external shipments declined by 2pc to 382,000t. This shows that higher metal prices helped protect sales value but did not offset the pressure on operating earnings.

Amag aluminium earnings also faced headwinds from lower premiums, a stronger euro-dollar exchange rate, and tariff effects across the company’s divisions. The result highlights the difficult position of European downstream aluminium producers, which must manage weak regional demand, high costs, and uncertain trade conditions.

Automotive Weakness Hits Casting and Rolling Performance

Amag’s casting division improved productivity but continued to face weak demand from the European automotive industry. US trade tariffs also affected performance, adding another layer of pressure to already fragile customer demand.

The rolling division faced similar challenges in automotive applications. Sales weakened in the automotive sector, although industrial applications and packaging showed stronger demand. This mixed performance reflects a broader split in downstream aluminium markets, where packaging and industrial uses remain more resilient than vehicle-related consumption.

High energy and personnel costs at Amag’s Ranshofen site further compressed margins. This is a major structural issue for European aluminium processors, especially as competition from lower-cost regions remains intense and customers continue to push for cost control.

Higher Aluminium Prices Limit the Earnings Decline

Higher LME aluminium prices helped limit the fall in Amag aluminium earnings. Average LME aluminium prices were 7.4pc higher than in 2024, supporting revenue even as shipment volumes declined.

However, lower premiums reduced the benefit of stronger aluminium prices, particularly in the metal division. The division also faced weaker shipments and exchange-rate pressure, showing that price gains alone cannot fully protect margins when premiums, volumes, and currency conditions move against producers.

Amag declined to provide an earnings forecast for 2026 because market conditions remain challenging. Still, the company pointed to some positive signs from economic forecasts, sentiment, customs arrangements, and order intake. Overall aluminium demand is expected to rise, but rolled aluminium demand in Europe is likely to remain weak.

The Metalnomist Commentary

Amag’s results show that European downstream aluminium remains caught between price support and weak industrial demand. The key risk is that tariffs and high operating costs continue to erode competitiveness even if broader aluminium consumption improves.

Russian Aluminium Dominates LME Stocks Amid Decline in Indian-Origin Metal

Russian Aluminium Dominates LME Stocks Amid Decline in Indian-Origin Metal

The proportion of Russian aluminium stored in London Metal Exchange (LME) warehouses surged to 65% by the end of July, despite the overall quantity of Russian metal remaining largely stable. This shift in market share is primarily due to a significant reduction in the stock of Indian-origin aluminium, which depleted over the course of the month.

According to the latest report from the LME, Russian-origin aluminium on-warrant stocks totalled 233,775 tons at the end of July, marking a modest increase of 1,215 tons compared to the previous month. However, this relatively small increase led to Russian aluminium accounting for 65% of the total on-warrant LME stocks, a significant jump from 50% at the end of June. In contrast, the total on-warrant LME stocks fell to 359,250 tons, representing a 23% decline from the start of the month.

The LME distinguishes between two types of Russian aluminium warrants: Type-1, for metal stored before the LME's ban on Russian metals produced on or after April 13, and Type-2, which pertains to metal subject to trade restrictions imposed after that date. Type-1 Russian warrants decreased by 1.9% over the month to 225,450 tons, while Type-2 warrants increased from 2,775 tons to 8,325 tons.

Meanwhile, Indian-origin aluminium stocks in LME warehouses fell sharply, down by 37% to 119,575 tons by the end of July. This decline reduced the Indian share of total on-warrant LME stock to one-third, down from 41% at the end of June.

Earlier this year, Russian aluminium accounted for as much as 90% of LME stocks as Western consumers increasingly self-sanctioned against Russian metal in response to geopolitical tensions. This led to calls for a complete ban on Russian metal deliveries, which was eventually implemented by the LME in April, following new sanctions from the UK and US governments.

Nalco Record Profit Highlights India’s Aluminium Market Strength

Nalco

Nalco record profit in FY2025/26 shows how stronger production volumes, higher aluminium prices and improved operating efficiency lifted India’s state-owned aluminium producer to a new earnings high. The company reported profit of 58.16bn rupees for the year to March, up 9.2% from a year earlier.

Nalco record profit was supported by revenue growth of 6.3% to Rs178.43bn. In the final quarter of the financial year, profit rose by 7% to Rs17.18bn, while revenue increased by 7.9% to Rs51.03bn.

Nalco record profit also reflects stronger market realisations. Three-month aluminium prices on the London Metal Exchange averaged $2,780/t through the financial year, up from $2,553/t in the previous year.

The result reinforces the importance of India’s aluminium value chain. Higher domestic metal sales and stable alumina output strengthen Nalco’s position as India expands infrastructure, power, transport, packaging and industrial manufacturing.

Record Aluminium Output Supports Domestic Demand

Nalco set new records for aluminium production and sales during the year. Cast aluminium production reached 472,000t, while aluminium sales totalled 474,000t.

Domestic sales reached a record 461,000t. This is strategically important because it shows that India’s internal aluminium demand remains strong enough to absorb most of Nalco’s output.

Aluminium consumption in India is tied to several structural growth sectors. Power transmission, construction, transport, packaging, electrical products and manufacturing all require more aluminium as industrial activity expands.

Higher domestic sales also reduce exposure to export volatility. For Nalco, a larger Indian customer base can improve sales stability when global trade flows are affected by tariffs, premiums or regional demand swings.

The production record also points to better operating execution. Higher volumes matter only when supported by plant reliability, cost discipline and stable raw material flows.

Nalco said stronger production, improved realisations and operating efficiency across business units drove the performance. That combination allowed the company to capture better market pricing while expanding output.

Alumina and Price Realisations Strengthen Earnings Base

Nalco also produced 2.3mn t of alumina hydrate and recorded 1.4mn t of alumina sales. Alumina remains central to the company’s integrated aluminium model.

Integrated alumina supply gives aluminium producers stronger cost control. It can also protect margins when external alumina markets tighten or when smelters face higher raw material costs.

The increase in LME aluminium prices was another major earnings driver. Higher benchmark prices improved realisations and helped lift profits even as cost pressures remained a risk across energy-intensive metal production.

For India’s aluminium sector, Nalco’s results show the value of scale and integration. Producers with bauxite, alumina and smelting capacity can benefit more directly when aluminium prices rise and domestic demand expands.

The company’s record performance also supports India’s broader industrial policy goals. Aluminium is essential for electrification, infrastructure, transport lightweighting, renewable energy equipment and downstream manufacturing.

Nalco’s challenge now is to sustain output discipline and margin strength if aluminium prices become more volatile. The market remains exposed to energy costs, global trade measures and supply disruptions.

The Metalnomist Commentary

Nalco’s record profit shows that India’s aluminium market is gaining strength from domestic consumption, not only export opportunity. The strategic advantage will belong to producers that combine integrated alumina supply, reliable smelting operations and exposure to India’s expanding industrial base.

LME Green Premium Plans Tighten Carbon Thresholds for Copper and Aluminium

LME, Green Premium meet

LME green premium plans are moving into a more credible second phase. The exchange has tightened carbon thresholds for both copper and aluminium after industry feedback. It has also widened the data sources used in price assessments. As a result, LME green premium plans now look more practical for the physical market.

The biggest change is stricter carbon eligibility. The copper threshold falls to 4t of CO2 per tonne from 5t. The aluminium threshold falls to 8t from 10t. These limits cover scope 1, 2, and 3 emissions. Therefore, green metal premiums will now require stronger carbon performance than before.

This matters because the first proposal risked looking too loose. Market participants argued that the earlier copper threshold sat above the global average for LME brands. That would have weakened the premium’s value as a sustainability signal. Consequently, the revised framework gives low-carbon copper and low-carbon aluminium clearer differentiation.

LME Green Premium Plans Now Rely on a Broader Market Data Set

LME green premium plans now use a broader and more realistic pricing hierarchy. The exchange originally planned to rely only on transactions executed through Metalshub. It will now also recognize deals on other approved spot platforms. As a result, the assessment process should capture a wider slice of market activity.

The inclusion of long-term contract data is another important step. The LME will now accept executed long-term contracts that fall within the observation window. That matters because green metal trade is not limited to spot transactions. Therefore, green metal premiums may gain stronger liquidity support over time.

The exchange also clarified its three-layer data structure. Category one uses qualifying executed transactions and is sufficient if liquidity standards are met. Category two uses visible executable bids and offers. Category three uses corroborated and auditable market evidence only when the first two categories are insufficient. Meanwhile, this hierarchy gives the market a more transparent rule set.

Governance and Publication Rules Will Decide Market Credibility

Governance will be critical to whether the premium gains trust. The LME said it has strengthened measures to improve independence and transparency. It will also allow a formal objection window after each publication. That means traders can challenge inputs, treatment, and calculation outcomes. Therefore, the market will have more oversight than in the original concept.

Publication frequency will remain cautious at first. The exchange plans to publish global monthly premiums initially. Regional premiums and more frequent assessments may come later if liquidity improves. As a result, LME green premium plans are starting with a controlled rollout rather than an aggressive launch.

The broader implication is significant for metals markets. Buyers increasingly want verified carbon differentiation, especially in copper and aluminium. Producers also want recognition for lower-emission output when the market can support a premium. Consequently, the revised model could help turn decarbonisation data into a tradeable pricing signal.

The Metalnomist Commentary

The LME is making the right move by tightening thresholds and broadening the data pool at the same time. A green premium only matters if it is strict enough to mean something and flexible enough to reflect real trade. If liquidity develops, this framework could become an important reference point for low-carbon metals pricing.

Weda Bay Power Shift Favors Aluminium as Nickel Pig Iron Margins Weaken

Weda Bay

Weda Bay power shift plans could redirect electricity from nickel pig iron smelters toward aluminium production in Indonesia’s Weda Bay Industrial Park. The move shows how power allocation is becoming a strategic production tool when aluminium margins exceed nickel margins.

Weda Bay power shift discussions involve scaling back output at 22 NPI smelting operations in June. Market sources said the power would be redirected to Juwan, the park’s sole operating aluminium facility.

Weda Bay power shift strategy reflects changing metal economics. NPI producers are under pressure from higher nickel ore costs and weaker margins, while aluminium smelters are benefiting from firmer prices and Middle East supply concerns.

Juwan is a joint venture between Tsingshan and Xinfa, with nameplate capacity of 250,000 t/yr. The timing and scale of any NPI production cuts remain unclear.

Aluminium Margins Pull Power Away From NPI

The planned power reallocation highlights the importance of electricity in Indonesian metals production. Both NPI and aluminium smelting are power-intensive, so the most profitable metal can influence where electricity is directed.

Aluminium prices have strengthened because of supply disruption linked to the Middle East. The region accounts for about 9% of global aluminium output, making any disruption significant for global balance.

The LME aluminium cash official price rose to a four-year high of $3,767.50/t on 14 May before closing at $3,636/t on 18 May. These higher prices have improved aluminium smelting margins.

NPI margins are moving in the opposite direction. Rising nickel ore costs and weaker profitability have reduced the incentive to maintain full output at some Indonesian smelters.

This creates a clear commercial logic. If electricity is constrained or strategically controlled, producers may prefer to allocate power toward aluminium rather than lower-margin NPI.

NPI Cuts Could Tighten High-Grade Nickel Units

Any sustained reduction in Weda Bay NPI output could support nickel pig iron prices, especially for higher-grade material. Higher-grade NPI remains important for stainless steel producers that need nickel-rich blending units.

Demand for higher-grade NPI has stayed relatively firm because stainless mills are using more scrap. Greater scrap use can increase the need for higher-nickel inputs to balance melt chemistry.

The situation also shows how Indonesia’s nickel and aluminium industries are becoming increasingly connected through infrastructure. Power, ports, industrial parks and Chinese-backed investment now shape multiple metal supply chains at once.

Tsingshan is also building a new aluminium project at Weda Bay with designed capacity of 800,000 t/yr. The first 400,000 t/yr phase is expected to start by the end of this year or in early 2027.

That expansion could make power allocation even more important. If aluminium capacity grows while NPI margins remain weak, Weda Bay may increasingly prioritise aluminium production over nickel pig iron during periods of electricity constraint.

The Metalnomist Commentary

Weda Bay shows that Indonesia’s industrial parks are becoming flexible metal platforms, not single-commodity hubs. When aluminium margins beat NPI margins, electricity itself becomes the deciding raw material.

LME Green Premium Plans Aim to Redefine Sustainable Metals Pricing

LME

The LME green premium plans mark a new phase in transparent pricing for low-carbon metals. The London Metal Exchange will work with its new HKEX Group subsidiary in Dubai to publish green premiums for LME-registered copper, aluminium, nickel and zinc with enhanced sustainability credentials. These LME green premium plans seek to turn voluntary ESG claims into priceable attributes, giving producers a clearer route to monetise decarbonisation efforts. However, the success of LME green premium plans will depend on credible thresholds and sufficient traded liquidity.

How LME green premium plans will work

Under the proposal, the LME will first define premium sustainability thresholds for each metal. These thresholds will use internationally recognised methodologies and remain under periodic review. Brands that meet the thresholds will be eligible for trading on Metalshub’s sustainable metals segment, creating a distinct pool of verified low-carbon units. As a result, the LME green premium plans link brand eligibility directly to measurable ESG performance, rather than broad marketing claims.

Meanwhile, newly formed HKEX subsidiary Commodity Pricing and Analysis (CPAL) will act as pricing administrator. CPAL will publish green premiums based on Metalshub transaction data and wider physical market intelligence. This structure attempts to ensure that any quoted green premium reflects real traded values, not theoretical estimates. The LME has also launched a discussion paper to gather feedback on CPAL’s methodologies, signalling openness to industry input before finalising the framework.

Implications for producers and buyers

For producers, the LME green premium plans offer a possible route to recover decarbonisation costs through differentiated pricing. Smelters and refiners that invest in renewable power, recycling and process optimisation could gain a premium over standard brands. However, the LME acknowledges that not every metal may show a clear premium immediately, especially where green supply remains limited or buyers resist paying extra.

For buyers, transparent green premiums could simplify procurement strategies. Large OEMs and traders could reference CPAL’s published differentials when sourcing lower-carbon metal, instead of negotiating bespoke ESG surcharges. Therefore, the LME framework may support more standardised contracts for sustainable metals, especially in automotive, packaging and energy infrastructure supply chains. Ultimately, the credibility of LME green premium plans will hinge on robust verification, clear data and the avoidance of double counting across schemes.

The Metalnomist Commentary

The LME is moving from passive disclosure to active price discovery for sustainable metals, which is a significant shift. If CPAL delivers liquid, trusted benchmarks, green premiums could finally move from conference panels to contract clauses. The bigger question is whether clear price signals will accelerate decarbonisation fast enough in carbon-intensive segments like aluminium and nickel.

Aluminium Bahrain Profits Surge as Prices Offset War-Linked Output Losses

Aluminium Bahrain

Aluminium Bahrain profits rose sharply in the first quarter as higher London Metal Exchange aluminium prices and stronger delivery premiums outweighed lower production and sales volumes. The company reported profit of 75.3mn Bahraini dinars, more than four times the level recorded a year earlier.

Aluminium Bahrain profits were supported by a 22% year-on-year increase in average LME three-month aluminium prices to $3,195/t. Stronger regional premiums also helped lift earnings during a period of tightening aluminium supply.

Aluminium Bahrain profits still fell by almost a third from the previous quarter because of production disruption and shipping constraints linked to the Iran war. The company’s output and deliveries both declined as the Strait of Hormuz disruption affected raw material and product flows.

The result shows how aluminium producers can benefit from higher prices during supply shocks, while still facing direct operational pressure when logistics and plant reliability are disrupted.

Hormuz Disruption Cuts Alba Output and Sales

Alba produced 339,734t of aluminium in the first quarter, down 14% from a year earlier. Sales fell by 17% to 312,563t over the same period.

The volume decline followed Alba’s decision on 16 March to shut three reduction lines totalling about 300,000 t/yr of capacity. That represented around 19% of the company’s total output capacity.

The shutdown was a response to supply constraints caused by shipping delays through the Strait of Hormuz. The waterway is critical for Gulf industrial supply chains, including alumina, carbon products, spare parts and aluminium exports.

Alba’s facilities were then damaged by a missile strike on 28 March, adding physical asset risk to the logistics disruption. This turned a regional shipping issue into a direct production and repair challenge.

Despite lower volumes, value-added products remained important. They accounted for 71% of Alba’s sales, unchanged from a year earlier.

That product mix matters because value-added aluminium typically carries better margins and stronger customer relationships than standard ingot. In a disrupted market, maintaining value-added sales helps protect earnings quality.

Dunkerque Deal Could Expand Alba’s European Footprint

Alba’s agreement to acquire Aluminium Dunkerque in France adds a strategic European dimension to its current operating challenges. The company announced the acquisition plan on 4 March and signed a share purchase agreement on 6 May.

The deal remains subject to regulatory approval. If completed, it would give Alba a major European aluminium production asset at a time when western buyers are prioritising supply security.

The acquisition could also diversify Alba’s geographic risk. Current disruption in the Gulf has shown the vulnerability of aluminium producers exposed to Middle East shipping routes and regional conflict.

A European asset would give Alba closer access to automotive, packaging, construction and industrial customers in the region. It could also support the company’s value-added product strategy.

However, the timing is complex. Alba must manage reduced output, damaged facilities and supply-chain disruption at home while pursuing a major overseas acquisition.

For the aluminium market, Alba’s first-quarter result reinforces the current contradiction. Prices and premiums are high because supply is tight, but the same disruption creating stronger pricing is also cutting physical production.

The key issue is how quickly Alba can stabilise operations and restore capacity. If Middle East disruption continues, Gulf aluminium supply could remain constrained, supporting premiums but limiting volumes available to customers.

The Metalnomist Commentary

Alba’s quarter shows that higher aluminium prices cannot fully offset operational exposure to war, shipping disruption and plant damage. The Dunkerque acquisition may become more strategically valuable if Gulf producers need geographic diversification to protect long-term customer supply.

LME Minimum Volume Threshold Delay Gives Members More Time for Electronic Trading Shift

LME electronic platform

LME minimum volume threshold enforcement has been delayed until 24 August, giving members more time to adapt systems, workflows and automated trading processes. The London Metal Exchange said the extension followed requests from market participants for additional testing before enforcement begins.

The LME minimum volume threshold rule is part of a wider reform package designed to shift more trading activity onto the electronic LMEselect platform. The rule sets block trade thresholds at 15 lots for aluminium, 10 lots for copper, lead and zinc, and five lots for nickel.

The LME minimum volume threshold formally took effect on 30 March, but enforcement was initially suspended under a 12-week grace period. That non-enforcement window has now been extended by two months, delaying the first enforcement date to late August.

The delay does not change the direction of LME reform. It only gives members more time to prepare for a market structure that increasingly rewards electronic execution, price transparency and on-screen liquidity.

Electronic Trading Reform Moves Forward on a Slower Timeline

The LME’s reform package aims to increase activity on LMEselect while preserving the exchange’s daily-date structure and physical trading features. This balance is important because the LME serves both financial participants and physical metals users.

The minimum volume threshold is designed to push smaller trades toward electronic execution. Larger trades can still use block-style arrangements, but the thresholds create a clearer boundary between electronic order book activity and inter-office trading.

The exchange said members needed more time to modify and test automated systems. This is a practical issue, not just a regulatory one. Trading firms must ensure order routing, compliance monitoring, audit trails and execution systems can handle the new framework.

The revised timetable also delays the launch of the new automated crossing order type to 22 June. The tool has been available in the market test environment since 2 February, but the exchange wants to allow more build and testing.

The new schedule creates a two-month gap between the crossing tool launch and the end of the MVT grace period. The previous timeline offered only one month.

This matters because crossing functionality could help participants manage execution under the new regime. It gives members another tool before the LME starts enforcing minimum volume thresholds.

The Liquidity on Orderbook Programme has also been delayed. LOOP will now launch on 3 August instead of 22 June, shortly before the MVT grace period ends.

LOOP is intended to add liquidity on LMEselect before full enforcement begins. Its delayed launch means the market will have less time to observe how additional order-book incentives affect execution behaviour.

The expanded definition of short-dated carry will also take effect on 24 August. This change will allow more trades to qualify for lower transaction fees, aligning the carry fee change with the end of the grace period.

These timeline changes show that the LME is still committed to reform, but it is trying to avoid operational disruption. A rushed transition could weaken confidence among members, especially in markets where physical users rely on stable execution channels.

Fee Incentives and Audit Monitoring Reinforce the Order Book Strategy

The LME’s fee changes remain central to its market structure strategy. Client fees are now differentiated by venue, creating a financial incentive to use LMEselect.

Inter-office transaction fees have risen by about 20%. At the same time, client electronic trading and clearing fees have been reduced by 7.4-8.5%.

The exchange said these changes lowered the all-in transaction cost for a client outright trade on LMEselect by 4.5%. This makes electronic execution more attractive from a cost perspective.

The fee structure supports the same goal as the minimum volume threshold. The LME wants more price competition and liquidity to appear on the electronic order book.

This is strategically important for base metals markets. Aluminium, copper, zinc, lead and nickel all depend on transparent price discovery because LME prices influence physical contracts, hedging, inventories and financing.

More electronic liquidity could improve visible market depth. It could also reduce reliance on bilateral inter-office execution for trades that can be handled on-screen.

However, the transition also creates compliance and workflow challenges. Members must determine which trades fall below the thresholds, how to route them, and how to document exceptions.

The LME will continue monitoring sub-MVT inter-office trading during the grace period. It will also generate example audit requests for members.

Members will not be required to respond to these sample audit requests during the extended non-enforcement period. But the process gives firms a preview of the documentation and oversight expected after enforcement begins.

That approach is useful. It lets the exchange test market behaviour and helps members identify gaps before penalties or enforcement actions apply.

The latest delay also shows that the LME is managing competing priorities. It wants to modernise execution and improve transparency, but it must avoid disrupting the physical metals ecosystem that underpins its global benchmark role.

The reform package was first set out in September 2024 and refined through consultations and roadmap updates in 2025. The latest timeline adjustment suggests the LME is still responding to member feedback while maintaining its long-term direction.

For industrial users, the change may not immediately affect physical metal procurement. But it could gradually influence hedging costs, execution methods and liquidity conditions around benchmark pricing.

For brokers and trading firms, the impact is more direct. They must invest in systems, compliance procedures and client workflows that fit a more electronic market structure.

For the LME, the key test will be whether the reforms increase electronic liquidity without weakening the market’s daily-date flexibility. That daily-date structure remains one of the exchange’s defining features for physical metals users.

The Metalnomist Commentary

The LME delay is not a retreat from electronic reform; it is a controlled transition. The exchange is giving members more time, but the strategic direction remains clear: more order-book activity, stronger transparency and fewer small trades handled off-screen.

Alba Reports Strong Profit Growth for Q4 and FY2024 on Higher Output and LME Prices

Aluminium Bahrain

Aluminium Bahrain Sets New Production Record and Boosts Value-Added Sales

Aluminium Bahrain (Alba) delivered strong financial results in both the fourth quarter and full year of 2024, supported by record aluminium production and higher London Metal Exchange (LME) prices.

Alba’s Q4 2024 profit rose 58.5% to BD37.1 million ($98 million) compared to the same period in 2023. Full-year profit climbed 56.4% to BD184.5 million, reflecting robust market conditions and operational stability.

Alba set a production record of 1.622 million tonnes in 2024, slightly up by 0.1% from the previous year. This came despite a minor fire in November at a power rectiformer supporting Reduction Line 1.

The output milestone follows the full optimisation of Reduction Line 6, which reached its 560,000 t/yr capacity in April 2023.

Value-Added Sales and Premiums Drive Earnings Momentum

Average LME aluminium prices were 7% higher year-on-year in 2024, with Q4 prices up 17%, helping to lift Alba’s top line. Meanwhile, spot aluminium delivery premiums surged to multi-year highs amid tight global supply and growing geopolitical risk.

Alba’s sales volumes rose by 1% to 1.61 million tonnes in 2024. 

Notably, value-added product (VAP) sales rose to 72% of total sales, compared to 68% in 2023, supporting stronger margins.

The company’s performance reflects a combination of operational excellence, strategic investments in capacity, and favorable pricing trends. As aluminium demand continues to rise globally, Alba is well positioned to capture premium market segments with its value-added offerings.

LME Explores Sustainable Metals Premiums to Boost Low-Carbon Pricing Signals

LME Metals Premiums

Focus Keyphrase: sustainable metals premiums

The London Metal Exchange (LME) is advancing its push toward greener metals by proposing a new system of sustainable metals premiums. These premiums would reflect the verified sustainability credentials of LME-approved brands across metals such as nickel, aluminium, copper, and zinc. LME chief executive Matthew Chamberlain confirmed growing market support for pricing mechanisms that reward low-carbon and responsibly produced metals.

The proposed sustainable metals premiums build on LME’s earlier collaboration with Metalshub, which launched a pricing channel for low-carbon nickel in 2023. That platform, grounded in Nickel Institute methodologies, allows buyers to source low-emission nickel grades. The new proposal expands the scope by using standards from multiple industry bodies, offering a unified framework for sustainable pricing across multiple base metals.

Expanded Criteria and Digital Infrastructure Power the Initiative

The LME confirmed that premiums will include broader sustainability factors beyond just carbon intensity. These could involve energy sourcing, supply chain transparency, and environmental impact metrics, all underpinned by robust third-party assessments. Qualified brands will submit verified data through LMEpassport, the exchange’s digital registry for physical metal information.

Using Metalshub’s spot platform, a pricing administrator will analyze submitted data and publish market-based premiums for qualifying brands. This will enable market participants to differentiate and pay for sustainability attributes, improving transparency in global metal procurement. The LME sees this as a long-term foundation for sustainability-linked pricing benchmarks in the industrial metals market.

LME’s Sustainability Strategy Gains Fresh Momentum

This initiative represents a revival of LME’s sustainability pricing ambitions after it postponed a separate low-carbon aluminium contract in 2020. At the time, the market lacked the infrastructure and participation needed to support a new product. Today, disclosure standards, certification systems, and digital traceability tools like LMEpassport provide the critical backbone for this renewed effort.

According to Chamberlain, increasing “sophistication in sustainability standards” across the metals industry now allows the LME to “credibly support pricing premiums for verified sustainable production.” If successful, these premiums could reshape how metals are valued and sourced globally.

The Metalnomist Commentary

The launch of sustainable metals premiums could transform procurement norms in metals markets. As ESG mandates intensify across industries, transparent price signals for low-carbon production will gain strategic importance. LME's alignment with digital traceability and verified standards gives this initiative the credibility it needs to succeed — provided market adoption follows.

Goldman Sachs Cuts Aluminium Price Forecast on Weaker Global Growth

Aluminium

Trade Tariffs Pressure Aluminium Market Outlook

Goldman Sachs has lowered its aluminium price forecast due to slowing global growth driven by rising US trade tariffs. The US bank now expects LME aluminium prices to average $2,000/t in Q3 2025, rising to $2,300/t by year-end. This is significantly down from its prior forecast of $2,650/t by late 2025 and $3,100/t in 2026.

US tariffs on aluminium imports from key trading partners have weakened global demand and sentiment. Meanwhile, new tariffs announced in April—targeting electronics and pharmaceuticals—may further suppress economic activity. Goldman now sees aluminium demand growth at 1.1–2.3% over 2025–26, down from earlier 2.4–2.6% projections.

Market Faces Surplus, But No Smelter Closures Expected

Goldman Sachs forecasts a global aluminium surplus of 580,000 tonnes in 2025, reversing a previously expected deficit. However, it does not foresee widespread smelter shutdowns, even with prices at the cost curve’s 75th percentile. Still, a prolonged downturn below $2,000/t could eventually force curtailments to stabilize supply-demand balance.

The bank cautioned that downside risks remain, especially if the US-China trade war escalates. Despite near-term weakness, Goldman anticipates a moderate demand-driven recovery in late 2025 into 2026.

The Metalnomist Commentary

Goldman’s aluminium downgrade reflects how industrial metals remain highly sensitive to trade policy shifts. Producers may avoid closures in the short term, but prolonged margin pressure could reshape the supply landscape.

Copper Aluminium Pricing Divergence Deepens as Middle East Shock Turns Metal-Specific

Sucden Financial

Copper aluminium pricing divergence is becoming clearer as base metal markets absorb the first shock of the Middle East conflict. Copper is shifting back toward physical flows, inventories and policy risk, while aluminium remains supported by direct disruption to Middle East supply chains.

Copper aluminium pricing divergence reflects a broader change in market behaviour. Traders are moving away from headline-led volatility and focusing more on spreads, premiums, inventories and real supply constraints.

Copper aluminium pricing divergence also shows that the base metals complex is no longer trading as one geopolitical basket. Each metal is now being priced according to its own exposure to the war, its physical balance and its ability to replace disrupted supply.

UK broker Sucden Financial said the conflict initially drove broad volatility across commodities. But that phase is fading, leaving copper and aluminium on different pricing paths.

Copper Moves From Macro Risk to Physical and Policy Pricing

Copper began the year as a macro-driven metal. Prices moved with broader risk sentiment, oil, gold and cross-asset positioning.

That relationship is now weakening. Copper is increasingly being priced through its own market signals, including Shanghai inventory drawdowns, US flow incentives, mined supply quality and sulphuric acid-related supply-chain disruption.

This shift matters because copper is no longer responding only to global growth fears or geopolitical headlines. It is being priced through physical availability and policy exposure.

The Comex premium has periodically reopened the arbitrage for copper units to move into the US. This has made the interaction between LME, Comex, inventories and US policy more important to price discovery.

Sucden said the next phase of copper pricing could be shaped by material-security concerns. These include tariff threats, incentives to hold more metal in the US and the strategic value of copper in energy infrastructure.

This is a macro-to-micro rotation. Copper is moving away from broad geopolitical trading and toward a market driven by premiums, spreads, stock locations and supply-chain constraints.

Sulphuric acid remains a key hidden risk. Copper supply from leaching operations, particularly in regions such as the Democratic Republic of Congo and Chile, can be affected if acid availability tightens or costs rise.

The market still remains exposed to recession fears. A deeper economic slowdown caused by the conflict could weigh on copper demand and financial positioning.

However, copper’s resilience suggests that traders are giving greater weight to structural tightness. Supply challenges, low-quality mined material and long-term demand from grids, electrification and industrial policy continue to support the metal.

Sucden argued that copper’s long-term direction remains higher and that price dips should be bought. The structural case has not changed, while eventual dollar weakness after a conflict resolution could provide further support.

Aluminium Holds a Firmer Physical Floor After Supply Shock

Aluminium has already repriced much of the Middle East disruption. The metal briefly moved toward the upper end of its recent range as the conflict escalated, but repeated failures above $3,650/t suggest the market needs further supply deterioration to justify another major move higher.

This does not mean aluminium is weak. It means the initial panic premium has already been absorbed.

Aluminium’s support is more physical than copper’s. The disruption affects smelting, feedstock flows and export availability from the Middle East, making the supply shock more direct than headline numbers may suggest.

Sucden said aluminium remains the base metal with the clearest exposure to the Middle East war. Ex-China supply is tighter, London Metal Exchange inventories are falling and nearby spreads have moved into backwardation.

Chinese inventories have risen, but that does not fully offset the tightness outside China. Regional availability matters more when logistics, origin and delivery routes are disrupted.

Aluminium smelters also cannot restart quickly. Once production is curtailed, bringing capacity back requires time, stable power and commercial confidence.

Elevated energy prices add another layer of cost support. Even if the war de-escalates, smelters and downstream producers may still face a higher operating cost base.

Sucden said de-escalation could initially push aluminium prices toward $3,400/t. But any decline may prove short-lived if physical tightness remains.

This gives aluminium limited immediate upside but also limited downside. The market has already priced much of the shock, yet replacement supply is not easy to find.

The broader implication is that aluminium is trading a tighter physical balance, not only a war premium. That makes its price floor firmer than a market driven purely by sentiment.

For industrial buyers, the copper-aluminium split is important. Copper procurement risk is increasingly tied to policy, US flows and strategic inventory. Aluminium risk is tied more directly to missing tonnes, energy costs and disrupted regional supply.

The Metalnomist Commentary

The Middle East conflict is exposing the real structure of each base metal market. Copper is becoming a policy-and-premium metal, while aluminium is being supported by a more immediate physical supply shock.

Global Aluminium Output March Growth Slows Despite Annual Gains

International Aluminum

Global aluminium output in March rose year-on-year but slowed slightly compared to February’s pace, signaling potential volatility ahead. The global aluminium output March data from the International Aluminium Institute reveals shifting regional dynamics as China leads production while other regions show mixed trends.

China Drives Annual Output Growth but Faces Trade Headwinds

Global aluminium production totaled 6.23 million tonnes in March, up 2.27% from the same month last year. However, average daily production declined to 200,900 tonnes, down from February’s revised 202,100 tonnes. China was the largest contributor, producing 3.73 million tonnes—up 3.41% year-on-year. Only October and December 2023 saw higher output.

Domestic demand and healthy profit margins drove China's production growth. However, escalating trade tensions with the U.S. may undermine this momentum. The aluminium industry is now watching closely for signs of further instability in Chinese industrial output.

Mixed Regional Trends Highlight Uneven Global Recovery

Outside China, production showed mixed results. Europe’s output increased 2.77% to 594,000 tonnes, while Asia (excluding China) rose 1.22% to 415,000 tonnes. Africa and South America posted stronger growth at 7.81% and 3.15% respectively.

In contrast, output declined in North America (down 0.88%), Oceania (down 1.86%), and the Middle East (down 2.61%). These declines may reflect energy costs, regulatory changes, or weakening demand in key export markets.

Price Volatility Reflects Market Uncertainty

London Metal Exchange (LME) aluminium prices averaged $2,650/t in March, a notable increase from $2,270/t a year earlier. However, prices retreated in April to an average of $2,407/t amid global equity market declines triggered by worsening U.S.–China trade tensions. This volatility is raising concern across supply chains and influencing production strategies globally.

The Metalnomist Commentary

The March rise in global aluminium output masks underlying signals of softness in monthly momentum. With geopolitical tensions and pricing instability increasing, producers may adopt a more cautious stance in the months ahead.

Southeast Asia Aluminium Premiums Could Decouple From Japan on Chinese Semi Flows

Aluminium

Southeast Asia aluminium premiums could begin to decouple from Japan as Vietnamese buyers increasingly accept Chinese-origin semi-finished products for remelting. The shift suggests regional aluminium pricing may become more dependent on origin acceptance than on traditional Asian premium benchmarks.

Southeast Asia aluminium premiums are still supported for Western-origin and free-trade-agreement cargoes, with some deals above $300/t on a cif Thailand and Vietnam basis. However, cheaper Chinese semi-finished products are creating a parallel supply route.

Southeast Asia aluminium premiums may therefore face a different pricing path from Japan, where origin requirements and customer preferences can be more restrictive. Vietnam’s willingness to buy and remelt Chinese-origin material is changing the regional supply equation.

The key issue is whether low-priced Chinese semi exports remain available. If they do, southeast Asian buyers may have less reason to pay Japan-linked premiums for standard P1020 supply.

Chinese Semi-Finished Products Create a Remelting Alternative

Chinese semi-finished aluminium products are attracting stronger interest from Vietnamese and Korean buyers. Traders pointed to low-priced offers for products such as aluminium wires under HS code 76149000.

Offers for high-purity aluminium stranded wires were reported at between an $80/t discount and a $100/t premium to London Metal Exchange prices. That is below the more typical $50-100/t premium range seen in recent months.

The economics become competitive after remelting. With remelting costs estimated at $150-200/t, buyers can effectively convert wire into P1020-equivalent ingot at a total premium of about $200-300/t.

That is competitive against direct P1020 purchases, especially when standard ingot premiums remain elevated. For price-sensitive buyers, remelting offers a practical way to secure metal units while avoiding higher conventional premiums.

This does not mean all customers will accept the route. Some buyers still require Western-origin or free-trade-agreement cargoes because of compliance, quality, customer specification or trade-policy considerations.

But the presence of a cheaper remelting route can weaken the connection between southeast Asia and Japan premiums. If Vietnam accepts material that Japan will not, the two markets may price differently.

Export Rebates Could Decide Sustainability

China’s 13% export tax rebate for certain aluminium products is central to the pricing gap. Some Chinese suppliers can offer semi-finished products at very low premiums, or even discounts to LME, because the rebate supports export economics.

This creates a policy-driven arbitrage. Instead of exporting primary aluminium directly, suppliers can export semi-finished products that receive more favourable tax treatment.

The sustainability of the trend depends on Beijing’s response. If Chinese authorities decide export volumes are excessive or distortive, they could remove or adjust the rebate.

That would quickly change the economics. Without the rebate, low-priced Chinese semis may become less competitive as a remelting feedstock for southeast Asian buyers.

For now, the trade flow matters because western aluminium supply remains tight and regional premiums are elevated. Buyers are looking for workable alternatives, and Chinese semis provide one.

The broader market implication is clear. Aluminium premiums are becoming more segmented by origin, trade rules and customer acceptance. Regional benchmarks may no longer move together if buyers have different views on acceptable supply.

The Metalnomist Commentary

The possible split between southeast Asia and Japan premiums shows how trade policy can reshape aluminium pricing as much as physical supply. If Chinese semi exports remain cheap, Vietnam could become a more flexible remelting market while Japan stays tied to stricter origin premiums.

LME Approves Hong Kong as a Warehouse Location, Strengthening China’s Metal Supply Chain

LME Hong Kong

A Strategic Move to Expand Market Access

The London Metal Exchange (LME) has officially approved Hong Kong as a warehouse location, providing a new entry point into China, the world’s largest metals consumer. This development allows LME-registered metals, including aluminium, copper, lead, nickel, tin, zinc, and aluminium alloy, to be stored in Hong Kong. As a result, the city is set to become a critical hub for LME-warranted metal storage once warehouse companies receive approval in the next three months.

Enhancing Connectivity to the Chinese Market

LME Chief Executive Matthew Chamberlain highlighted the importance of this expansion, stating that Hong Kong’s proximity to China makes it a natural hub for metals trade and logistics. The move strengthens the LME’s global warehousing network, which currently includes 465 approved warehouses in 32 locations worldwide. The exchange considers various factors, including regulatory frameworks, fiscal conditions, and transport infrastructure, when approving new locations.

Despite this progress, efforts to establish LME warehouses in mainland China have faced regulatory challenges. Both China’s regulators and the Shanghai Futures Exchange (SHFE), a key competitor to the LME, have resisted these moves. Nevertheless, the approval of Hong Kong presents an alternative solution, allowing international metal traders better access to the Chinese market.

Strong Market Interest in Hong Kong as a Metal Hub

The LME has received strong interest from warehouse operators, landlords, and metal owners regarding Hong Kong’s listing as a metals delivery point. This approval is expected to increase liquidity and provide a more efficient supply chain for global metals traders. As the first warehouse companies gain approval, Hong Kong is likely to play a pivotal role in global base metal storage and distribution.

By positioning Hong Kong as an LME metal storage location, the exchange strengthens its presence in Asia, bridging the gap between international metal markets and China’s growing demand. This move not only benefits global traders but also reinforces Hong Kong’s status as a key financial and logistics hub in the metals industry.

Alba Achieves Record Profits and Output in 2024 on Rising Aluminium Prices

Alba

Fourth Quarter Profit Soars 58.5% as LME Prices and Premiums Strengthen

Value-Added Product Sales Boost Bottom Line Despite Operational Setback

Aluminium Bahrain (Alba) reported robust financial results for 2024, posting record fourth-quarter and full-year profits on the back of historic output and favorable market conditions. Alba’s net profit for Q4 2024 surged 58.5% year-on-year to 37.1 million Bahraini dinar ($98 million). For the full year, net profit reached BD184.5 million, marking a 56.4% increase compared to 2023.

Production Record Set Amid Industrial Challenge

Alba achieved a production record of 1.622 million tonnes of aluminium in 2024, despite a minor industrial fire in November affecting its reduction line 1. The strong output follows the optimization of reduction line 6, which reached its full capacity of 560,000 t/year in April 2023. Notably, Alba’s operational resilience enabled it to maintain growth even in the face of disruptions.

Market Forces Drive Revenue Growth

The company benefited from a 7% increase in average LME aluminium prices in 2024, and a 17% spike during the fourth quarter. Spot aluminium delivery premiums hit multi-year highs, reflecting tight supply and heightened geopolitical risks. Sales volumes edged up 1% to 1.61 million tonnes, while value-added products made up 72% of total sales, up from 68% in 2023—further enhancing profitability.

Alba’s strategic focus on capacity optimization and value-added products has strengthened its market position, allowing it to capitalize on price surges and changing global dynamics. This success story highlights the resilience and adaptability required to thrive in the modern aluminium industry.

Asian Aluminium Premiums Stay Subdued as QMJP Offers Test Buyer Resistance

Aluminum

Asian aluminium premiums remained subdued this week as buyers assessed sharply higher quarterly cif main Japan port offers for July-September delivery. Two major producers opened QMJP negotiations at $460/t and $480/t, far above the April-June settlement of $350-353/t.

Asian aluminium premiums are now being pulled in two directions. Western-origin metal has tightened after the Iran war disrupted supply, giving producers a basis for higher offers. However, weak demand and greater availability of alternative units are limiting spot-market momentum.

Asian aluminium premiums also remain below the new QMJP offers. Current spot indications are around $320-380/t, while P1020 fca Korea indications for non-Russian material were heard at $320-350/t.

The gap between producer offers and spot levels suggests buyers may resist paying the full proposed premium. If QMJP settles above $400/t, non-western brands could continue trading below the benchmark.

Western-Origin Tightness Supports Higher Producer Offers

The higher QMJP offers reflect tighter availability of western-origin aluminium in Asia. Supply disruption linked to the Iran war has reduced confidence in some traditional flows, pushing producers to test stronger premium levels.

This is important because QMJP remains a key reference for aluminium trade across Asia. A high settlement can influence physical premiums, contract pricing and buyer behaviour beyond Japan.

However, the market is not uniformly tight. Some Asian smelters have received enquiries and are willing to sell into Europe or offer small volumes in Asia. Others prefer to wait for clearer direction from the QMJP negotiations.

This cautious behaviour shows how benchmark talks can freeze spot activity. Buyers do not want to commit at high levels before the benchmark is settled, while sellers do not want to underprice material if premiums rise.

The immediate market signal is therefore uncertainty, not shortage. Western-origin units command support, but broader aluminium availability remains mixed.

Stranded Wire and Russian Units Cap Spot Upside

Alternative supply is limiting the impact of higher QMJP offers. Stranded wire and Russian-origin aluminium units are weighing on sales of other brands, especially where buyers are more price-sensitive.

China’s exports of aluminium stranded wire rose sharply in April. Shipments under HS code 761490 increased by 166% year on year to 15,567t.

South Korea and Vietnam absorbed much larger volumes. Chinese shipments to South Korea surged to 2,911t, while shipments to Vietnam climbed to 2,288t. Exports to Thailand also rose to 619t.

These flows matter because stranded wire can create substitute supply pressure in regional aluminium markets. When alternative units are available, buyers have less urgency to accept premium increases for standard brands.

Russian-origin aluminium also remains a price-sensitive factor. Some buyers continue to avoid Russian material for policy or corporate reasons, but availability still affects regional market balance and non-western brand pricing.

Demand remains the bigger constraint. Buyers are likely to reduce volumes if both LME prices and QMJP premiums stay high. This limits the ability of producers to convert tight western-origin supply into broad spot-market price gains.

The next quarter may therefore produce a divided market. Western-origin material could secure stronger contract premiums, while non-western and alternative units trade at discounts.

The Metalnomist Commentary

Asia’s aluminium market is not rejecting higher premiums; it is questioning which metal deserves them. The real split is between tight western-origin supply and a softer regional market still supported by stranded wire, Russian units and weak demand.

LME Electronic Trading Reforms Aim to Boost Liquidity and Transparency

LME

LME electronic trading reforms will roll out in the first quarter of 2026. The London Metal Exchange plans to steer more flow to LMEselect. The exchange wants deeper liquidity and better price transparency. LME electronic trading reforms will limit smaller inter-office trades. Therefore, members must execute many tickets electronically. LME electronic trading reforms follow consultations since September 2024.

What the LME electronic trading reforms change

Block thresholds will restrict off-screen activity on three-month contracts. Thresholds are 15 lots for aluminium and 10 for copper, lead, and zinc. Nickel carries a five-lot threshold under the new rules. Trades below those sizes must use LMEselect. The rules apply to each monthly date out to one year. Carry trades between those monthly dates also move on-screen. However, cash and daily dates remain exempt from thresholds.

The exchange also simplifies administrative categories for exempt trades. It removed a separate booking category after member feedback. Therefore, members avoid extra post-trade complexity. Crossing rules will arrive in February before thresholds start. An automated crossing solution will support orderly execution. As a result, firms can match interest more efficiently and with audit trails.

Why the LME electronic trading reforms matter

The reforms should tighten bid-ask spreads for core metals. Greater on-screen flow often improves price formation. Moreover, surveillance tools work best with electronic prints. Market makers can manage risk across time buckets more cleanly. Consequently, liquidity may migrate from the ring to LMEselect. Price discovery for three-month contracts could become more robust.

The Metalnomist Commentary

The LME is aligning microstructure with modern market standards. Success hinges on member adoption and screen depth across monthly dates. Watch nickel and aluminium thresholds for early signals on liquidity gains.

EGA First to Digitally Connect Analysis to LME

Emirates Global Aluminium (EGA) has set a new standard as the first primary aluminium brand producer on the London Metal Exchange (LME) to implement a digital connection for its metal quality analysis system. This innovation removes the need for paper documentation, providing a more efficient and secure method for verifying the quality of metals. The company has established a direct digital certificate of analysis (CoA) connection from its smelters to the LMEpassport platform, ensuring all LME metal shipments meet required specifications and quality standards.

"The digital certificates of analysis will enable greater traceability, accessibility, and transparency in the process by eliminating paper documentation, which can often be damaged or lost as metal travels around the world," EGA stated.

All LME primary aluminium producers are required to digitize their CoA submission process to LMEpassport by October. This requirement will be phased in across all LME's physically delivered metals needing CoAs over the next 2-3 years.

Georgina Hallett, the LME's head of physical markets, expressed, "We are thrilled that EGA has made the first direct connection to LMEpassport, leveraging a digital solution that will eventually replace paper CoAs, enhancing security, traceability, and operational efficiency in the trading of physical metal."

UAE’s EGA Faces Bauxite Shipment Suspension from Guinea Amid Global Aluminium Market Disruptions

EGA

The global aluminium industry is facing renewed uncertainty as Emirates Global Aluminium (EGA), a UAE-based company, confirmed the suspension of bauxite shipments from its Guinea Alumina subsidiary. The halt was enacted by Guinean customs officials, who have yet to provide an explanation or a timeline for the resumption of exports. EGA has stated that, for now, the stoppage will not impact operations at its Al Taweelah alumina refinery in the UAE, a key link in the supply chain for aluminium production.

Aluminium prices on the London Metal Exchange (LME) responded swiftly to the news, surging 3.73% to reach $2,653.50 per tonne, marking a significant movement in the day’s trading session. This price increase adds to a year of volatility in the alumina market, driven by repeated supply interruptions. "We are seeking clarity from customs on the reason for this action and are working to resolve this as quickly as possible," said an EGA representative.

Rising Aluminium Prices and Global Supply Chain Concerns

The bauxite shipment suspension from Guinea follows a series of disruptions in alumina production worldwide, which have collectively placed pressure on the aluminium market. In Australia, US aluminium producer Alcoa has announced plans to fully halt alumina production at its Kwinana refinery, which has an annual capacity of 2.2 million tonnes. Meanwhile, China has seen its own limitations on alumina production this year, further tightening global supply.

These restrictions come as the aluminium industry navigates increasing demand for lightweight metals in various sectors, from construction to electronics, adding to price pressures. Market analysts suggest that such supply chain interruptions could lead to sustained high prices for aluminium if production does not stabilize soon.