Goldman Sachs raised its forecast for the aluminum price on the London Metal Exchange on Thursday, expecting the average price in the third quarter of 2026 to be $3,300 per ton, and the average price in 2027 to be $2,950 per ton. These figures are higher than the previous predictions of $3,200 and $2,750 per ton respectively.
The line stated that although the ceasefire agreement between the US and Iran is expected to reopen the Strait of Hormuz, the recovery of production capacity in the Middle East will be slower than the flow of oil, as the damaged production capacity needs to be gradually repaired and restarted.
Goldman Sachs predicts that the global aluminum market will be even more tight than previously expected - the shortfall in 2026 will increase from 570,000 tons to 720,000 tons, and the surplus in 2027 will decrease from 1300,000 tons to 590,000 tons, due to a decline in production in the Middle East exceeding the supply growth in Indonesia and China.
The report indicates that there are two possible scenarios for the recovery of supply in the Middle East: If the restarted damaged production is slow, the aluminum market surplus in 2027 may narrow to approximately 100,000 tons, with the price at around $3,250 per ton; if the recovery is faster than expected, the surplus may expand to 1.2 million tons, with the price dropping to $2,750 per ton. The LME aluminum price fell by 0.4% to $3,398.50 per ton on Thursday.
