On Monday 1 June 2026, three-month aluminium on the London Metal Exchange touched $3,707.50 a tonne, the highest price since March 2022, before settling near $3,685 in official trading (Reuters, 1 June 2026). The metal is up about 22% so far this year, and the front of the market is so tight that the cash contract traded more than $100 a tonne above the three-month price on 29 May, a 19-year high (Reuters via Economic Times, 29 May 2026). Analysts now expect the global market to run a deficit above two million tonnes in 2026.
That is a commodity headline. It becomes your problem the moment you order anything made of aluminium from a Chinese factory: e-bike frames, cookware, LED and electronics housings, furniture frames, packaging foil, solar mounting, window and door profiles. The metal sits inside the unit price. When the metal moves, the quote moves with it, and right now it is moving up.
What is actually pushing the price
The trigger is the Gulf. The Strait of Hormuz has been effectively closed since late February 2026, and the Middle East accounts for around 9% of global aluminium smelting capacity (Reuters, 1 June 2026). With regional metal stranded and the raw materials for smelting cut off, buyers in Europe, Japan and the United States are competing for the same tonnes, and exchange inventories have drained fast. One commodities desk called it the largest aluminium supply shock in at least 50 years (Investing News Network, 26 May 2026).
The usual release valve would be China, which makes close to 60% of the world's aluminium. That valve is shut. Chinese smelters are already running near the government capacity cap of about 45 million tonnes a year, and on 13 May 2026 the Ministry of Industry and Information Technology launched a nationwide inspection of energy use and emissions across heavy industry. At least one smelter in Baise, Guangxi has already cut output (Investing News Network, 26 May 2026). The one producer big enough to flood the market is being told to slow down.
Why it lands harder on a China invoice
Two things stack on top of the spot price when you buy from China specifically.
First, China removed its 13% export tax rebate on aluminium on 1 December 2024, announced by the Ministry of Finance on 15 November 2024 (ING, 15 November 2024). For years that rebate let Chinese mills quote unusually low on aluminium semis. It is gone, and by early 2026 exporters had largely passed the lost rebate straight to overseas buyers (Shanghai Metals Market, Q1 2026). You are now paying a higher base metal price and a higher Chinese price on top of it. It is the same playbook behind China's rare-earth export licences: a policy change in Beijing that lands as a line on your invoice.
Second, duties keep getting added in specific markets. In late May 2026 the Eurasian Economic Commission extended anti-dumping duties on aluminium tape from China at 13.14% out to 2031 (Investing News Network, 26 May 2026); that measure applies to the Eurasian Economic Union, not the EU. US importers already pay a 50% Section 232 tariff on aluminium, which is why the US Midwest premium sits at record levels. Whether any duty applies to you depends on where you import, so check your own market the way you would for any anti-dumping duty on Chinese goods before you assume a quote is clean.
The squeeze also shows up as physical premiums, the surcharge over the LME price you actually pay for delivered metal. The European duty-paid premium has climbed about 58% since early March, and the Rotterdam premium for extrusion billet has more than doubled to around $1,100 a tonne (Fastmarkets, via Reuters, 25 May 2026). A factory quoting you in good faith is feeding those numbers into the price.
What to do before your next order ships
Ask the supplier to split the quote into metal cost and processing cost. A factory that buys aluminium honestly can show you the two lines. One that cannot is either hiding a markup or does not track its own input cost, and both are reasons to slow down.
Fix the metal price in writing before you wire a deposit. On a 60 to 90 day order, a single clause tying the metal portion to the LME price on a named date, with a stated validity window, stops a supplier from re-quoting you higher after you have committed. The same discipline applies to the shipping side of the deal, which is the point of pinning down your Incoterms and landed cost in the contract rather than the email thread. On recurring orders, look at locking volume and price forward now instead of reordering at spot in two months.
When a metal or alloy surcharge appears mid-order, make it track the actual LME move, not a round number. You can check a documented $300 jump on a tonne of frames against the index. A line that just reads "raw material increase" gives you nothing to verify.
You cannot see any of this from your desk. You get one number in an email and no way to test it. A verified Mila agent on the ground pulls the real quote breakdown from the factory, checks the metal line against the day's LME price, and gets the pricing terms written down before any money moves, inside the WhatsApp thread you watch.
Sources: Reuters, Aluminium hits four-year high on renewed Middle East supply risks, 1 June 2026; Reuters via Economic Times, Premium for near-term LME aluminium at 19-year high, 29 May 2026; Investing News Network, Aluminum price hits four-year high on output curbs and Gulf supply shock, 26 May 2026; ING, China ends tax incentives on aluminium exports, 15 November 2024; Shanghai Metals Market, China aluminium semis export profits recover to pre-rebate-cancellation levels, Q1 2026; Reuters (Andy Home column), Warning lights flash as aluminum reels from Gulf shock, 25 May 2026.