Citigroup has lowered its three-month target price for the London Metal Exchange (LME) three-month aluminum price to $3,000 per tonne.
October 15, 2026
The reason for this adjustment is that the uncertainty in the demand outlook has continuously dampened market sentiment. Citigroup stated that in the first eight months of 2026, both China and global cyclical demand were generally weak, and there was insufficient momentum for the aluminum consumption to recover. Although recent macroeconomic indicators in China indicate signs of economic stabilization, this does not yet allow us to conclude that the demand has entered a clear recovery stage. The focus of the market has gradually shifted from the current tight physical supply to the prospect that the supply-demand balance may become more balanced after 2026, which has limited the upward potential of the aluminum price.
In terms of supply, Indonesia is becoming an important new supply source in the global aluminum market. Due to the war in the Middle East, some aluminum smelting capacity in the Gulf region has been shut down or damaged. The new smelting projects in Indonesia have accelerated the release of production, which helps to make up for some supply gaps. Data shows that Indonesia's aluminum export volume increased by 30.7% month-on-month in August, further strengthening the market's expectation for future supply improvement.
Overall, the current aluminum market still has regional supply shortages, but weak demand and the increase in supply from Indonesia are weakening the price support. Citigroup's lowering of the target price reflects the changing market pricing logic: investors are no longer only focusing on the current supply disruptions, but are paying more attention to the strength of medium-term demand recovery and the release of new production capacity.
