On October 31, 2026, NFC's Dak Nong aluminium smelter Phase II in Vietnam produced its first liquid aluminium — four months ahead of its original commissioning schedule. The early production milestone at Dak Nong is one of several supply-side developments that SMM analysis projects will return ex-China aluminium production to positive year-on-year growth in November 2026 for the first time since the Middle East supply disruptions earlier in the year. Combined with the ongoing restart of EGA's Al Taweelah smelter in the UAE (631 of 1,262 pots restarted by late October, full production expected Q1 2027) and the completed restart of Alcoa's Alumar smelter in Brazil during Q3 2026, the global aluminium supply picture outside China is meaningfully different entering Q4 2026 than it was in mid-year. For India's aluminium casting industry, which is sensitive to primary aluminium supply conditions through their effect on LME prices and secondary alloy feedstock availability, these developments carry direct implications.
The Dak Nong Project and Vietnam's Aluminium Ambitions
The Dak Nong smelter is part of Vietnam's long-stated ambition to develop an integrated aluminium industry built on the country's substantial bauxite reserves — among the largest in the world, concentrated in the Central Highlands region where Dak Nong province is located. NFC (a Chinese non-ferrous metals enterprise) is the developer and operator of the project, reflecting the pattern of Chinese investment in Southeast Asian aluminium infrastructure that has been a consistent feature of the global industry over the past decade. Phase I of the Dak Nong project was already in operation; Phase II's ahead-of-schedule first production adds incremental capacity to Vietnam's primary aluminium output. The project's significance extends beyond its individual tonne contribution: it represents a step in Vietnam's development as a primary aluminium producer, reducing the country's dependence on imported aluminium and creating a domestic feedstock base for its downstream aluminium processing industries — which in turn are significant exporters of aluminium fabricated products to global markets including India.
Ex-China Supply Recovery: The Aggregate Picture
SMM's November outlook projects that ex-China primary aluminium production will return to positive year-on-year growth — a modest 0.2% increase — after several months of contraction driven by the Middle East conflict's impact on Gulf smelter operations. The recovery is not uniform across regions: the UAE's EGA Al Taweelah restart is the largest single contributor, but at 631 of 1,262 pots restarted as of late October, it is still operating at roughly half capacity, with full recovery expected in Q1 2027. Brazil's Alcoa Alumar restart, completed in Q3, is fully contributing to ex-China supply. Vietnam's Dak Nong Phase II is in trial production — not yet at full commercial output — but its ahead-of-schedule commissioning suggests it will contribute meaningfully to Q4 2026 and Q1 2027 production. The net effect is a gradual, not dramatic, recovery in ex-China supply: enough to remove the acute shortage premium that Middle East supply disruption created, but not enough to generate a significant global supply surplus.
What This Means for LME Aluminium Prices
The combination of recovering ex-China supply and weakening Chinese downstream demand — the October PMI reading of 48.9% discussed in recent industry commentary — creates a supply-demand balance that is generally unfavourable for LME aluminium price recovery in the near term. Supply is returning to the market from multiple sources simultaneously: Middle East restarts, Brazil, Vietnam, and ongoing ramp-up of new capacity in Indonesia. Demand is softening in China's downstream processing sector as the peak season ends and construction-linked consumption remains structurally weak. The LME aluminium price, which fell below $3,000 per tonne in October, is likely to remain under pressure through Q4 2026 in this supply-demand environment, with recovery dependent on either a significant Chinese stimulus-driven demand uptick or further supply-side disruptions — neither of which is the base case at time of writing.
India's Input Cost Outlook
For Indian aluminium casting foundries, recovering global primary aluminium supply and the associated LME price pressure translates into a favourable input cost environment through Q4 2026 and likely into Q1 2027. Secondary alloy prices in India — which track LME with a lag and a conversion premium — should reflect the lower LME level in alloy supplier pricing over the coming months, reducing the input cost pressure that had characterised the mid-2026 period when Middle East supply disruptions pushed LME prices higher. The practical implication for a Kolhapur foundry purchasing ADC12 or LM25 ingot is that the alloy price environment entering the new year is more benign than it was in mid-2026 — though as the 2026 price cycle has demonstrated, the aluminium market can reverse sharply when supply disruptions occur or Chinese stimulus changes the demand picture. Locking in alloy supply at current levels through forward purchasing or short-term contracts, while maintaining flexibility to benefit from further price declines, is the procurement posture that the current supply outlook supports.