LME Aluminium Stocks Hit 36-Year Low Amid Supply Shocks

With global aluminium stocks at the London Metal Exchange plummeting to 250,000 tons—a level unseen since 1990—the market faces a precarious squeeze. The decline follows a 2-million-ton drop in Gulf production triggered by the February conflict in Iran, leaving the exchange’s remaining reserves dangerously concentrated.

Editorial·August 14, 2026·reads: 110

LME Aluminium Stocks Hit 36-Year Low Amid Supply Shocks

The supply dislocation has gutted the exchange’s available inventory, which has halved since the start of 2026. Despite this volatility, market sentiment remains strangely muted. Neither outright prices nor time-spreads have surged, as traders lean on optimistic projections regarding the restart of the Al Taweelah smelter in the UAE.

However, the apparent stability masks a deeper structural vulnerability. The dwindling pool of LME-warranted metal is now dominated by a single entity controlling 80% to 90% of the remaining stock, much of which is Russian-origin aluminium. This concentration of ownership has forced the exchange to invoke strict lending rules to mitigate the risk of a market corner, highlighting the disconnect between theoretical global supply and the metal actually available for trade.