I. Global LME Aluminum Price Trend

From April through the end of August 2026, global aluminum prices went through a notable cycle — a sharp initial surge followed by a gradual pullback and consolidation.

Starting in mid-April, escalating military tensions around the Strait of Hormuz in the Middle East triggered widespread market concern that major aluminum smelters in the Persian Gulf region, particularly the UAE's EGA, could be forced to halt production. This anxiety was compounded by the fact that aluminum inventories at the London Metal Exchange had already fallen to their lowest levels in nearly three decades. The combination of genuine supply fears and thin stockpiles drove LME spot aluminum prices above $3,600 per metric ton in May, marking a nearly four-year high.

By June, the market had begun to reassess the actual extent of the supply disruption, which proved less severe than initially feared, and the geopolitical risk premium started to fade. Structural demand drivers — including growth in electric vehicles, solar energy infrastructure, and AI data center construction — continued to provide a floor under prices. However, seasonal softness in traditional sectors such as real estate and home appliances offset much of that support, pushing prices into a consolidation range of roughly $3,100 to $3,200 per metric ton through July. Into August, as key smelters progressively resumed output and U.S.-Iran diplomatic talks showed signs of progress, the remaining war premium largely evaporated. By the end of August, prices were hovering around $3,200, with the near-term outlook pointing toward continued range-bound trading.

II. MJP (Main Japanese Port) Aluminum Premium Trend

On the premium side, the Main Japanese Port aluminum premium — widely regarded as the benchmark for physical aluminum pricing across Asia — settled at approximately $351 per metric ton for the second quarter of 2026. For the third quarter, it jumped to $395 per metric ton, a nearly 13% increase quarter-over-quarter and the highest level seen in about a decade. This reflected persistent tightness in the availability of high-quality, Western-origin primary aluminum in Asia. Producers had initially sought premiums as high as $440 to $480 per metric ton, but Japanese buyers pushed back firmly, and both sides eventually settled at $395. The higher MJP directly raised the landed cost of aluminum ingot imports across Asia, with Taiwan feeling the impact acutely.

III. USD/TWD Exchange Rate Trend

On the currency side, the U.S. dollar held relatively steady against the New Taiwan dollar between April and June, trading in a narrow band of roughly 31.5 to 31.7. In July, a combination of safe-haven demand and shifting capital flows pushed the dollar higher, with the rate briefly approaching 32.5. As August progressed, softer-than-expected U.S. employment data and growing expectations of Federal Reserve rate cuts sapped dollar momentum, allowing the Taiwan dollar to recover and the rate to settle back near 31.7 by month's end.

IV. Combined Impact on Taiwan's Aluminum Costs

TWD Procurement Cost = (LME Base Price + MJP Premium + Freight) × USD/TWD Exchange Rate

When viewed together, these three variables — LME base prices, the MJP premium, and the USD/TWD exchange rate — form the core equation that determines Taiwan's actual aluminum import costs. During April and May, the surge in LME prices combined with an already elevated Q2 MJP pushed procurement costs sharply higher for Taiwanese buyers. In June and July, although LME prices retreated, the Q3 MJP jumped to $395 and the dollar strengthened past 32.4, meaning that cost relief in Taiwan dollar terms remained limited. By the end of August, a stabilizing LME price and a stronger Taiwan dollar offered some breathing room, but with the Q3 MJP locked in at an elevated level, meaningful cost reduction in the short term remained unlikely.

[Overall Conclusion] In summary, the cost pressures faced by Taiwan's aluminum industry during this period were the product of three overlapping forces: a geopolitically driven spike in LME prices, a decade-high Asian physical premium, and a period of notable currency volatility. While conditions have partially eased from their peak, the underlying structural tightness in global supply has not fundamentally changed. Taiwanese buyers will need to continue monitoring all three indicators closely as they navigate procurement timing decisions in the months ahead.