Aluminum pricing has been notably volatile through Q1 2026. LME aluminum cash prices ranged from $2,300 to $2,750 per ton during the quarter. For CNC buyers, this volatility translates to quote validity questions, material cost passthrough, and negotiation leverage. This post shares what we're seeing in actual sourcing and what it means for pricing practices.
Month-by-month LME aluminum cash (3-month reference):
| Month | LME range | Contributing factors |
|---|---|---|
| January | $2,320-2,410 | Stable start, pre-CNY inventory drawdown |
| February | $2,400-2,750 | Sharp rise on alumina supply disruption, CNY production gaps |
| March | $2,540-2,680 | Partial normalization, but elevated base |
The pattern we saw: Q1 started stable, peaked mid-February on combined supply disruption and Chinese New Year production shortfall, and settled at elevated baseline through March. Compared to Q1 2025 average of approximately $2,380, Q1 2026 averaged approximately $2,530 — roughly 6% higher.
On specific grades (machining bar in 6061, 7075, 2024), the passthrough was similar — raw stock cost approximately 5-8% higher in Q1 2026 vs Q1 2025.
For a typical CNC aluminum part, material cost is usually 15-25% of finished part cost (the rest being machining labor, setup, overhead, finishing). So a 6-8% increase in raw aluminum translates to roughly a 1-2% increase in finished part cost.
This is why small aluminum price movements don't usually change our quote prices. We absorb volatility within quote validity periods and communicate when the math changes significantly.
Exceptions where material cost is more significant:
Spot orders quote prices are locked for 30 days. Beyond that, we may need to re-quote if material prices have moved significantly. 30 days is usually enough time for a customer to process PO and place order.
For annual blanket orders (100,000+ units per year), we offer either:
Customers with cost-plus procurement usually prefer indexed; customers with fixed budgets prefer fixed pricing.
If raw material cost on a customer's active order moves 5%+ during production, we notify. Most customers prefer to know in advance, even if the order price is already locked.
For customers signing multi-year agreements, we include escalation clauses tied to LME or published aluminum indices. Cleaner than fighting over every price adjustment.
Not a prediction (we're not traders) but what we're hearing from our alloy suppliers:
Our expectation: Q2 pricing will stabilize at or slightly below Q1 exit prices. No dramatic moves expected barring unexpected supply disruption.
For customers planning orders, Q2 is historically a good time to place larger orders with pricing protection. We're happy to discuss specific programs.
Email [email protected] — we reply within 1 business day. Our engineering team writes these posts and handles customer questions directly.
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