Bank of America predicts that the global aluminum market will remain in a supply shortage in 2026. However, as new supplies from Indonesia gradually enter the market, the aluminum market may turn into a slight surplus in 2027.
Bank of America notes that new supplies are particularly likely to increase significantly in the second half of 2027, thereby changing the current tight supply and demand pattern and becoming an important factor contributing to the downward pressure on aluminum prices next year.
In the short-term trend, Bank of America believes that aluminum prices will still have room for a rebound in the coming weeks, but as the market gradually enters 2027, the release of new supplies may put more pressure on prices.
One important feature of the current aluminum market is the tight spot supply, and the market's term structure shows a significant near-month premium.
Bank of America believes that the increased hedging demand from consumers may to some extent alleviate this near-month premium structure, but if the liquidity in the physical market remains insufficient, it may ultimately trigger a squeeze-out situation, causing short-term significant fluctuations in aluminum prices.
In terms of demand, Bank of America believes that grid investment remains an important driver of future aluminum consumption growth. As grid spending bottoms out and accelerates again, aluminum consumption is also expected to improve accordingly.
