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Home - News - Bank of America: It is expected that aluminum will rise to $3,000 per ton in 2025

Bank of America: It is expected that aluminum will rise to $3,000 per ton in 2025

June 27, 2024
According to foreign news on June 24, industry analysts said that the weakness of global manufacturing dragged down aluminum prices, but this impact may be short-lived because of the tight physical market, including in China, a big consumer.
China, the world's largest aluminum producer, is expected to produce 42.5 million tons of the metal this year, close to its annual capacity of 45 million tons. Supply shortages of bauxite and alumina raw materials are expected to push prices back up.
Aluminum for three-month delivery on the LME traded near $2,520 a tonne on Wednesday, down 10 percent since hitting a two-year high of $2,799 a tonne last month.
Uday Patel forecasts that there is an oversupply of about 500,000 tons in the global primary aluminum market, with aluminum prices averaging $2,450 per ton this year.
But he added that U.S. and British bans on shipments of Russian metals to exchanges, as well as logistical hurdles caused by the Red Sea shipping crisis, could tighten supplies.
Other analysts are more optimistic, predicting a supply deficit this year, a view reflected in the physical market premium over the LME benchmark price.
Since late March, the US spot market has seen a 10 per cent rise in duty-paid aluminium premium to about $440 a tonne, while the European premium has risen 30 per cent to about $340 a tonne over the same period.
Analysts at Macquarie said in a note: "The faster growth in spot aluminium premiums in major consuming regions excluding China indicates continued improvement in the physical market."
Macquarie expects global aluminum production to be about 72 million tons this year, with a supply and demand gap of 960,000 tons. It is expected that there will be a 2.26 million tons aluminum supply and demand gap in China in 2024. That could mean further increases in China's aluminium imports.
China's aluminium imports rose more than 60% in May from a year earlier to 310,000 tonnes, according to the data.
Michael Widmer, analyst at Bank of America, said: "While near-term upside is limited, aluminium remains tight and LME prices should move higher once demand accelerates again." Michael Widmer expects aluminum prices to average $3,000 per ton in 2025, with a gap between supply and demand of 2.1 million tons. He forecast aluminum prices to average $2,500 this year, with a supply and demand gap of 800,000 tons.