Commodity Radar: Aluminium’s 2025 gains highest in 3-yr. Sit tight for a steeper ride in 2026, says Religare analyst

Industry Overview - Aluminium prices have increased nearly 23% this year due to demand-supply risks, with a significant rise in sentiment for the metal [1][10] - The global aluminium market is facing supply constraints, particularly with the shutdown of South32 Limited's Mozal smelter in Mozambique by March 2026, which will further reduce global aluminium supplies [1][10] - China, the largest global aluminium producer, is prioritizing the control of overcapacity in metal production to manage deflationary pressures, and is expected to breach its 45 million tonne output cap this year [3][5][10] Market Trends - Aluminium on the MCX has shown a healthy correction after reaching a high of 315.15, indicating a continuation of the upward trend in the coming weeks [6][10] - Current prices are significantly above key exponential moving averages and the upper Bollinger Band level, suggesting a bullish outlook [6][10] - A potential upside move towards the levels of 308 to 310 is anticipated, with strong support around Rs 280 to 283 [6][10] Future Outlook - The market is expected to maintain elevated aluminium prices through early 2026, with a transition into deficit conditions likely [7][10] - Key bullish price drivers include smelter risks, low inventories, and structural supply constraints, alongside consistent demand growth from sectors such as EVs, renewables, and infrastructure [8][10] - Limited availability in LME warehouses is also seen as a positive factor for aluminium prices, with a primary positive price view unless impacted by adverse macroeconomic conditions or trade policy shifts [8][10]