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Informist, Wednesday, Jun. 10, 2026

 

MUMBAI – Fitch Solutions company BMI has raised its aluminium price outlook for 2026 by $100 to $3,200 per tonne, reflecting a tighter global supply outlook as the US-Iran conflict continues to disrupt aluminium production in West Asia. However, the revised price outlook is lower than the Bloomberg consensus of $3,425 per tonne for 2026. 

 

Aluminium prices rose 19.1% year-to-date to close at $3,592 per tonne on Jun. 5, the sharpest gains after the war broke out in West Asia Feb. 28. In the near term, the market remains highly sensitive to further escalation. Aluminium prices could climb to $4,000 per tonne in the coming weeks if geopolitical tensions continue to rise amid the fragile ceasefire in West Asia, BMI said.

 

"The balance of risks remains skewed to the upside, as tighter supply conditions are likely to keep prices well above the 2025 average of USD 2,631/tonne. That said, risks remain balanced, with demand-side headwinds set to intensify later in the year and temper the extent of price gains, while any easing in geopolitical tensions could also weigh on price strength," BMI said.

 

BMI expects the global aluminium market deficit to widen to 1.6 million tonnes in 2026, as supply disruptions at major West Asian smelters tighten an already constrained market. Supply pressures were building even before the outbreak of the US-Iran conflict, driven by China's cap on smelting and power shortages affecting producers outside China.

 

"We now estimate that aluminium production in the (West Asia) region will decline by 33% in 2026 to 4.6 mnt (million tonnes) from 6.9 mnt in 2025, taking roughly 3% of global output offline," BMI said. The region accounts for roughly 8% of global aluminium smelting capacity. 

 

On the demand side, BMI expects macroeconomic challenges to be more pronounced during the second half of 2026, weighing on growth and limiting the upside potential for aluminium prices. "We now forecast global aluminium demand to increase by just 0.6% in 2026, reaching around 73.9mnt, as support from structural demand drivers is partly offset by a weaker macro backdrop," BMI 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. In 2027, BMI expects aluminium prices to average $2,931 per tonne, easing modestly from 2026 levels as supply-side pressure abates slightly, yet remaining above the 2025 average.

 

Meanwhile, "risks to our price forecast are tilted to the upside, particularly if an escalation in the US-Iran conflict results in further capacity disruptions and amplifies supply tightness," BMI added.  End

 

US$1 = INR 95.29

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Reshma Ravi

Edited by Rajeev Pai

 

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