“Aluminium Market Q3/2026: Premium Surge, Scrap Shortage, Currency Volatility – In-Depth Asia Outlook BY SO OK TRADING: 7 July 2026”
Aluminium Market Q3/2026 – In-Depth Outlook
BY SO OK TRADING | 7 July 2026
Q3/2026 has become a major test for aluminium buyers and users in Asia . Although global LME prices have started to correct, real costs are surging due to the MJP Premium reaching its highest level in 11 years and a persistently tight scrap market, compounded by the depreciation of the Thai Baht and other regional currencies.
Key Turning Point: MJP Premium Hits 11-Year High
MJP Q3/2026 settled at 395 USD/MT (CIF Japan), up 12–13% from Q2/2026 (350–353 USD/MT) – Deal finalized on 6 July 2026.
Drivers: Geopolitical risks on Middle East shipping routes, rising freight and insurance costs, and LME stocks falling to ~300,000 MT. Result: The All-in Price for Asian buyers surged to ~3,500 USD/MT, even though LME prices remain around ~3,100 USD/MT.
LME Aluminium Outlook (as of 7 July 2026)
Current Prices:
Cash Settlement: 3,105 USD/MT
3-Month Forward: 3,113 USD/MT → Contango (+8 USD/MT) – still present but less severe than before.
Financial Institution Forecasts:
Goldman Sachs: 3,300 USD/MT → Global supply remains constrained
SO OK TRADING: 3,100–3,300 USD/MT → Market in correction phase
Trading Economics: 3,591 USD/MT → Positive outlook driven by inflation and energy costs
CRU Group: 4,020 USD/MT (Worst Case) → If shipping routes are permanently disrupted
Scrap & Remelt Outlook
UBC (Used Beverage Cans): 55–65% of LME Cash (~1,700–2,015 USD/MT) → Severe shortage due to closed-loop recycling demand
Scrap 6063 (Extrusion): 85–90% of LME Cash (~2,640–2,795 USD/MT) → Strong demand from billet producers for clean scrap
Remelt (ADC12): 2,800–3,000 USD/MT → Supported by high energy costs and EV component demand
Thai Baht (THB) Outlook
Trading within 33.00–34.00 THB/USD
Pressure factors:
Capital flows back to the US (AI investment and Fed interest rate policy)
Thailand’s current account under pressure from high energy costs
Bank of Thailand likely to cut interest rates → widening interest rate differentials Result: Thai aluminium importers face an average +2,500 THB/MT increase in costs, even as LME prices correct.
Industry Outlook
EV & Hybrid Vehicles: Sustained demand continues to support Remelt and Scrap markets
Data Centers & Clean Energy: Rising aluminium use in structures and equipment
Packaging: Recycling plants competing aggressively for UBC to meet ESG targets
Asian Foundries: High energy and labor costs prevent price reductions
Recommendations for Aluminium Buyers
1️⃣ Double Hedging: Lock LME 3-Month contracts and FX Forward at 33.30–33.40 THB/USD 2️⃣ Use FCD Accounts: Pay directly in USD to reduce FX spread 3️⃣ Monitor Scrap Market: Clean scrap is becoming a “strategic resource” with intensifying competition
⚡ Aluminium Market Q3/2026 is a “Divergence Market” Global prices are correcting, but real costs in Asia are surging. Buyers must adopt strategies that combine metal price management + FX hedging to maintain competitiveness.
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