Aluminum prices have been at their lowest level since mid‑February and fell to $3,060 per tonne on 1 July 2026. The drop comes as the US dollar is strong and commodities priced in the currency are at risk of falling price. It is a sharp reversal for the industrial metal, which had already seen a 16 percent fall in June - its worst monthly decline since 2008.
The reason for this slump is the dollar’s rally and the dollar has gained 2.5 percent in the past two months (thanks to the Federal Reserve’s hawkish stance). A stronger dollar makes commodities more expensive for buyers using other currencies and dampens demand in global markets.
In early this year aluminum prices soared as conflict in the Middle East disrupted almost 10% of global output. But as supply concerns ease as the situation settles the upward momentum has waned. Investors have also turned their eye to stocks in China, which is also rallying, and that is also driving away from industrial metals.
The price comparison underscores the volatility. On February 19 aluminum was at $3,060 per tonne and went up to $3,300-$3,400 between March and May due to supply shortages. For June, prices dropped 16% and by July 1 they were back to $3,071 per tonne, with intraday lows at $3,060.
Other metals also felt the impact. Copper slipped 0.9 percent to $13,254 per tonne and iron ore fell 1.6 percent to $97.50 per tonne in Singapore. And precious metals like gold and silver were weaker, with the dollar’s rise stoking investor anxiety.
Aluminum could see a further downside in the long term if the dollar remains strong and global demand slows down. The short term risks are monetary policy driven and long term recovery based on industrial activity in China and Europe. Aluminum may regain momentum if supply stability and demand recovery are in place in the longer run but it remains highly correlated in terms of currency movements and geopolitical risk.
In fact, aluminum fell to $3,060 per tonne and its fall in value to $3,060 per tonne indicates that a stronger U.S. dollar and lessened supply concerns have been the main cause of aluminum’s decline. Investor concerns were already high in the first batch of June with the biggest month drop since 2008 and it is still highly uncertain whether the industrial metal will find a firm footing if it is in fact to recover, and demand growth in the world markets and currency movements will be crucial for the industry in the next few years.
