Global Aluminium Market Q4/2026: Japan Premium (MJP) Under Supply Pressure SO OK TRADING | 6 OCT 2026

 Global Aluminium Market Q4/2026: Japan Premium (MJP) Under Supply Pressure
SO OK TRADING | 6 OCT 2026

✨ Introduction
In early October 2026, the global aluminium market stands at a critical turning point. The Japan Premium (Main Japan Premium – MJP) for Q4/2026 has yet to reach a final settlement, reflecting cautious negotiations between buyers and sellers.

Although structural demand from electric vehicles (EVs) and clean energy remains strong, the market is under pressure from tight supply in the Middle East and sluggish demand across Asia, pushing expectations that the Japan Premium may settle below $280 per ton.

 
Japan Premium (MJP) Situation
Negotiations for the final quarter of 2026 remain unresolved. Most recently, Rio Tinto reduced its offer from $310 → $280 per ton (CIF Japan). Buyers anticipate the final settlement may fall below $280 per ton, as demand in Japan, Thailand, and Southeast Asia has yet to fully recover.

Looking at the year as a whole, premiums remain significantly higher than in 2025. Even with a correction in Q4, the market continues to reflect the structural strength of aluminium pricing.

 
⚔️ Middle East Supply Crisis
The GCC (Gulf Cooperation Council) region, which accounts for over 20% of global primary aluminium exports (excluding China), has faced severe disruption due to geopolitical conflict:

Major smelters Al Taweelah (UAE) and Alba (Bahrain) were hit by missile attacks in March 2026.
Qatalum (Qatar) declared force majeure, cutting output to 60% due to restrictions in the Strait of Hormuz.
Regional output plunged 43% YoY in August, down to 299,000 tons.
Recovery remains slow: EGA (UAE) has restored only 25% of capacity, with full recovery expected in Q1/2027. Alba (Bahrain) continues to face uncertainty due to raw material shortages.

 
Global Market Adjustments
The global market has adapted quickly to the Middle East shock through two mechanisms:

China’s Counterbalance: Exports surged 17% YoY, offsetting lost GCC supply.
Trade Diversification: Buyers in Japan, Taiwan, and the U.S. shifted procurement to Australia and India to secure continuity.
 
LME Aluminium Market Snapshot
Cash/3M Price: $3,130–$3,250 per ton (down from the mid-year peak of $3,800).
LME Stocks: 240,375 tons, the lowest in a century.
Stock Composition: Over 90% Russian-origin aluminium, creating a segmented market — surplus on paper but scarcity in non-Russian supply.
 
Market Drivers
Bullish Factors

Global manufacturing PMI above 51, signaling industrial recovery.
Structural demand from EVs and renewable energy.
Bearish Factors

China’s full-capacity production limits upside potential.
Middle East risks already priced in, reducing speculative momentum.
 
Signals from China
September 2026 data shows positive momentum:

NBS Manufacturing PMI: 50.1 → back to expansion.
Caixin PMI: 52.1 → highest in five months.
Aluminium Processing PMI: 53.9 → driven by alloy and automotive demand.
China remains the stabilizing pillar of the global aluminium market.

 
Short-Term Outlook
Support: $3,100–$3,130 per ton (backed by high costs and PMI strength).
Resistance: $3,280–$3,320 per ton (capped by Chinese supply).
During China’s “Golden Week” (Oct 1–7), SHFE trading paused, reducing volumes temporarily. Once reopened, accumulated buying orders are expected to support prices above key levels.

 
Industrial Impact
EV Industry: Lower raw material costs enhance competitiveness for Japanese and ASEAN manufacturers.
Electronics & Semiconductors: Reduced input costs support production expansion.
Construction & Infrastructure: Stable prices accelerate large-scale projects and renewable energy initiatives.
 
Conclusion
The global aluminium market in Q4/2026 remains in a state of structural supply tightness. While China’s increased production has helped balance the market, uncertainty in the Middle East continues to pose risks.

The Japan Premium (MJP) is expected to settle below $280 per ton, marking a clear shift toward a buyer’s market. In the long term, aluminium will remain a strategic metal driving the clean energy transition and the global green economy.

 
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