LME: The Latest Power Struggle in Global Aluminium Supply

The London Metal Exchange (LME) stocks of aluminium have hit a record low since 1990, exacerbated by geopolitical tensions and supply-chain issues. Gulf aluminium production suffered, leading to reduced LME registered stocks. The aluminium market remains uncertain, dominated by Russian brands and a single dominant entity holding a significant position.

The London Metal Exchange (LME) is experiencing its lowest aluminium stock levels since 1990, reflecting severe supply-chain dislocation largely due to the Iran war. Primary aluminium production in the Gulf region plummeted by 2 million metric tons annually since the U.S. and Israel's February attack on Iran.

This sudden supply shock has prompted a market scramble for available metal from the LME, whose registered stocks have halved since the start of 2026, now standing at a mere 250,000 tons. Despite this, neither outright LME prices nor time-spreads appear significantly affected, as optimism about global supply recovery prevails, with encouraging progress reports from the war-impacted Al Taweelah smelter in the UAE.

However, global supplies do not translate to LME availability. The remaining LME warrant pool is mostly Russian aluminium, held predominantly by one entity. LME's daily reports reveal this entity's dominant position, holding 80-90% of all warranted stocks, triggering lending rules to prevent a market corner.