Global Metals Weekly

The report highlights near-term vulnerability in aluminium prices due to rising supply from China and Indonesia, even as the global market trends toward a long-term deficit. While geopolitical disruptions in the Middle East initially tightened markets, the easing of those supply constraints has led to increased market uncertainty.

Key Takeaways

• 1.Aluminium prices look vulnerable near-term due to easing supply risks in the Middle East and persistent demand concerns.
• 2.While global aluminium production ex-China has declined, China and Indonesia are increasing output, creating potential for oversupply.
• 3.BofA maintains a constructive long-term outlook for aluminium, projecting a deficit this year and a path toward $4,000/t.

Table of Contents

• Threefold headwinds to aluminium
• China boosts semi exports and primary imports
• Tight aluminium markets in World ex-China
• Focus on supply increases
• Sentiment holding up, but cracks emerging
• Headline PMIs ok, but comments are awful
• Aluminium production ex-China down, but China's is up
• China incentivized to increase aluminium exports
• Premia are rising in the US and Europe
• LME has squeezed tighter
• Curves are still very backwardated
• Funds are still very long
• Appendix
• Price forecasts and summary of rationale/risks
• Supply and demand balances
• Disclosures

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