Key Moments
- LME aluminium cash offer price eased 0.06 per cent on June 19 to USD 3,400 per tonne as the market digested prolonged West Asia supply disruptions.
- Goldman Sachs cut its West Asia aluminium production outlook by 660,000 tonnes for 2026 and 1 million tonnes for 2027, delaying expected capacity restarts to early 2027.
- The bank now projects a global aluminium deficit of 720,000 tonnes in 2026 and a smaller 590,000 tonne surplus in 2027, compared with a previously expected 1.3 million tonne surplus.
LME Aluminium Prices Edge Lower
The ongoing crisis in West Asia is projected to have a lasting impact on the global aluminium market, with supply losses now anticipated to extend through 2027. Despite these concerns, London Metal Exchange (LME) aluminium prices recorded only mild declines on June 19, even as analysts highlighted the sector’s vulnerability to continued disruptions and delayed recovery of damaged smelting facilities across the region.
On June 19, the LME aluminium cash bid price was USD 3,399 per tonne, a 0.07 per cent decline from USD 3,401.5 per tonne on June 18. The cash offer price moved down 0.06 per cent to USD 3,400 per tonne, compared with USD 3,402 per tonne previously.
| Contract / Metric | Date / Reference | Bid (USD/tonne) | Offer (USD/tonne) | Change (%) |
|---|---|---|---|---|
| Cash | June 18 | 3,401.5 | 3,402 | – |
| Cash | June 19 | 3,399 | 3,400 | Bid: -0.07, Offer: -0.06 |
| 3-month | June 19 | 3,397.5 | 3,398 | Bid: -0.07, Offer: -0.09 |
| December 2027 | June 19 | 3,175 | 3,180 | Bid: -0.47, Offer: -0.47 |
The LME aluminium 3-month bid price slipped 0.07 per cent to USD 3,397.5 per tonne, and the 3-month offer decreased 0.09 per cent to USD 3,398 per tonne. Further out on the curve, December 2027 bid and offer levels each fell 0.47 per cent to USD 3,175 per tonne and USD 3,180 per tonne respectively.
The LME aluminium 3-month Asian Reference Price was assessed at USD 3,396.5 per tonne.
Inventory Movements and Alumina Pricing
LME warehouse stocks also recorded declines. Opening inventories dropped by 1,000 tonnes, or 0.32 per cent, to 315,525 tonnes on June 19 from 316,525 tonnes the previous day. Live warrants dipped 0.01 per cent to 247,575 tonnes, while cancelled warrants decreased 0.29 per cent to 67,725 tonnes.
In the alumina market, the LME alumina Platts price held steady at USD 307.1 per tonne, with no change reported.
West Asia Outages Set to Prolong Tightness
According to Goldman Sachs, aluminium prices are expected to remain underpinned in the near term as production losses in West Asia last longer than earlier anticipated. The bank noted that recent industry commentary and company disclosures point to a slower restart of smelting capacity in the region, even in the event that the Strait of Hormuz reopens under the announced interim agreement.
Goldman Sachs revised down its West Asia aluminium production forecasts by 660,000 tonnes for 2026 and 1 million tonnes for 2027, now assuming that damaged capacity restarts only in early 2027 instead of in the second half of 2026. The bank currently expects Bahrain’s output to return to pre-conflict levels by mid-2027 and projects that the UAE’s production will recover by the end of 2027.
With these adjustments, Goldman Sachs now anticipates a global aluminium deficit of 720,000 tonnes in 2026, compared with its earlier estimate of a 570,000 tonne deficit. For 2027, it forecasts a surplus of 590,000 tonnes, significantly below the previously projected surplus of 1.3 million tonnes.
Indonesia and China Poised to Drive Supply Growth
Although West Asia remains a key source of supply risk, Goldman Sachs expects production growth in Indonesia and China to help counterbalance some of the impact over the next two years.
The bank raised its Indonesian primary aluminium production outlook to 1.7 million tonnes in 2026 and 2.9 million tonnes in 2027, attributing the upgrade to faster-than-expected ramp-ups at Adaro, Taijing Morowali and Juwan Weda Bay. It noted that Indonesian output is already up around 89 per cent year-on-year so far this year.
For China, Goldman Sachs increased its aluminium production forecasts to 45.6 million tonnes in 2026 and 46.3 million tonnes in 2027, citing strong margins that are supporting restarts and ongoing production above the country’s nominal 45 million tonne capacity cap.
Revised Price Outlook and Scenario Risks
Reflecting expectations for a tighter market in the near term, Goldman Sachs raised its LME aluminium price forecast for Q3 2026 to USD 3,300 per tonne from USD 3,200 per tonne. It also lifted its average 2027 price view to USD 2,950 per tonne from USD 2,750 per tonne.
However, the bank described its stance as bearish relative to current forward prices of around USD 3,400 per tonne for Q3 2026 and approximately USD 3,250 per tonne for 2027.
Goldman Sachs emphasized that the broader outlook remains highly sensitive to how quickly West Asian capacity returns. A slower-than-expected restart could leave the market close to balance in 2027 and help sustain prices near USD 3,250 per tonne. In contrast, a faster recovery could expand the 2027 surplus to around 1.2 million tonnes and pull prices closer to USD 2,750 per tonne.
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