Shares of Hindalco Industries Ltd., Vedanta Aluminium Ltd. and National Aluminium Company Ltd. (NALCO) fell up to 5% on Friday, October 23, as a major aluminium smelter in the United Arab Emirates resumed operations, raising the prospect of additional global supply and putting prices under pressure.
Emirates Global Aluminium (EGA) has completed 50% of the restart of its Al Taweelah smelter, with full production expected in the first quarter of calendar year 2027. The facility produced around 1.6 million tonnes of aluminium in calendar year 2025.
The development comes at a time when aluminium prices have already retreated from their 2026 high of $3,800 per tonne to around $3,020 per tonne. The faster restoration of smelting capacity in West Asia, along with supplies from other regions and rising Chinese exports, could ease the global supply-demand balance.
According to media reports, 631 of the smelter’s 1,262 reduction cells are now operational. The facility was shut down in March following an Iranian attack on Khalifa Economic Zone Abu Dhabi, which prompted an evacuation of the site. EGA restarted its first restored reduction cell on May 26 and has since progressively brought more units back online.
Chief Executive Officer Abdulnasser Bin Kalban has reiterated that the smelter is expected to return to full production in the first quarter of 2027.
Aluminium prices unlikely to run away
Axis Capital expects the global aluminium market to move into a surplus in calendar year 2027 and has reiterated its negative view on the sector. The brokerage has set its London Metal Exchange (LME) aluminium price expectation at $2,800 per tonne for CY27, implying a further decline of around 7% from current levels.
Aluminium prices fell to their 2026 lows on October 15 amid ample supplies outside West Asia, a faster-than-expected restart of smelting infrastructure in the region and rising Chinese exports despite a 30% export duty.
The prospect of additional supply comes as the metal has lagged other base metals this year. While aluminium prices are down around 0.25% in 2026, copper has gained 15% and zinc 18.5%. Gold prices have fallen 4%, silver is down 21.5%, steel has declined 1%, and iron ore is down 15%.
Focus on aluminium stocks
Aluminium stocks extended their losses on Friday, with NALCO shares falling over 5% to ₹295.25, while Hindalco Industries declined 2.44% to ₹863.95. Vedanta Aluminium shares were down 2.10% to ₹351.65.
The stocks have not had the best month of October so far, with Vedanta Aluminium becoming the worst performer on the Nifty Metal index, declining over 13% so far for the month. Shares of NALCO are down 9%, while those of Hindalco are down 6% so far this year.
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