Aluminium market volatility is to persist through 2026.
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The aluminium market is likely to remain volatile through the rest of 2026 with tariffs, capacity and elevated pricing likely to hit beverage manufacturers.
Procurement intelligence firm Beroe has warned that drinks companies need to avoid treating the current market as either a “temporary crisis” or a “permanent shortage” and advises them to secure core volumes while preserving flexibility.
The aluminium market has been under pressure with increased tariffs as well as the impact of the Iran war on exports.
Beverage companies are advised to review the cost and risk structure of their aluminium supply contracts.
“For beverage and food-packaging buyers, sourcing decisions must therefore compare total landed cost, including LME, regional premiums, tariffs, freight, carbon costs, and conversion charges, rather than headline metal prices alone. Recycling and domestic rolling capacity improve resilience but cannot fully replace imported primary aluminium in the short term,” said Adithiya Iyappan, senior analyst at Beroe.
He also advises them to split supply across can manufacturers, rolling mills, and geographies rather than relying on a single import corridor or metal source.
Iyappan suggests they prioritise suppliers with strong recycled-content capabilities and transparent scrap sourcing, and reserve strategic volumes from new or expanding capacity where commercially sensible.
He highlights that new production is ramping up in North America, while further beverage can capacity is planned across China, Southeast Asia, and Australia.
However, use hedging (a risk-management strategy to lock in prices) selectively, he advises, as it can reduce exposure to LME volatility but cannot hedge tariffs, physical shortages, or regional premiums.
“To alleviate current pressures, companies should address both physical supply risks and commercial exposure. In the short term, they should increase visibility into supplier metal origins, inventory coverage, lead times, and logistics routes, especially where Gulf-origin or imported primary aluminium is involved,” he said.
“Build modest safety stocks for critical SKUs rather than accumulating inventory broadly, because prices remain elevated while additional supply is gradually returning through smelter restarts and capacity ramp-ups.”
He also said that beverage manufacturers could look at a range of short-term actions from rationalising sizes, reducing unnecessary SKU complexity, and evaluating alternative packaging to “genuinely exposed products”.
However, while the situation remains volatile there are some signs of movement in the sector.
While Middle East shipping uncertainty continues Iyappan said that new capacity is ramping up across several regions. He highlighted that production outside China is recovering while Gulf plants are gradually restarting and European and USA smelters are preparing for restarts.
