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Informist, Thursday, Mar. 12, 2026

 

MUMBAI – BMI, a Fitch Solutions company, has raised its aluminium price outlook for 2026 to $3,100 per tonne from $2,900 per tonne, as recent developments materially heightened the likelihood of a more acute supply squeeze. The US–Iran conflict has compounded existing supply concerns, with West Asia collectively accounting for roughly 8% of global primary aluminium supply, BMI said in release.

 

Aluminium prices are likely to retain significant upside in the coming weeks. "In line with our Country Risk team's base case of a short-lived but intense military campaign, the escalation in tensions and the associated disruption to shipping through the Strait of Hormuz have strengthened the near-term upside risks, and we now see scope for prices to move towards $3,700 per tonne," BMI said in the release.

 

Regional premiums have also responded to the disruption, with the supply shock driving US and European aluminium premiums higher by 11.4% and 4.3%, respectively, on a weekly basis as of Mar 6. The spike reflects mounting concern among western buyers, who remain heavily dependent on West Asian exports.

 

The ongoing military conflict has prompted a revision of 2026 global aluminium balance, with the market now forecast to move into a deeper deficit of 1.06 million tonnes. The extent of the market impact will be shaped by the conflict's duration and any further escalation, BMI said.

 

In addition, demand for the base metal is seen robust due to expansion of emerging end-use sectors. "Mainland China will continue to be the primary engine of global aluminium consumption, supported by sustained strength in the clean energy sector despite ongoing property market weakness," according to the release.

 

India will also be a major demand driver for alluninium as infrastructure growth will continue and there is likely to be manufacturing expansion, and rising electrification needs, BMI said. The US is also likely to contribute to demand for alluminium, amid the country's accelerating data-centre expansion, it said. 

 

In the longer term, aluminium prices are expected to stay elevated, reflecting a market that remains prone to recurring periods of tight supply and deficit, it said. "In 2027, we expect aluminium prices to average $2,931/tonne, easing only modestly from 2026 levels as supplyside pressures abate slightly, yet remaining above the 2025 average," BMI said.  End

 

US$1 = INR 92.29

 

Reported by Taniva Singha Roy

Edited by Avishek Dutta

 

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