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Informist, Wednesday, Sept. 10, 2025

MUMBAI – FitchSolutions company BMI sees a slight upside in prices of aluminium for the remainder of 2025, as market focus is shifting towards US policy expectations, a softer dollar, and stable demand from China from geopolitical risks, soft global demand prospects, and lingering tariff headwinds. The annual average aluminium price forecast has been maintained at $2,580 per tonne for 2025, it said in a report.

In the longer term, prices of aluminium are expected to increase as demand is supported by the accelerating shift to a green economy and tight market conditions. BMI also expects limits to Chinese production growth helping to narrow the global aluminium surplus after 2025. China is the leading aluminium consumer globally. The country is positioned to reach its peak smelting capacity of 45 million tonnes in the coming years. "At present, new aluminium smelting capacity is only permitted to offset decommissioned capacity, and we expect the government will not extend the 45mnt (million tonne) cap due to its recent commitment to net-zero emissions by 2060," it said.

In 2026, BMI sees aluminium prices averaging $2,600 per tonne, higher than the 2025 average price because of rise in global demand. "Beyond that, we expect aluminium prices to peak at USD2,900/tonne in the second half of the decade as aluminium demand is supported by the acceleration of the green energy transition," it said.

Year-to-date, aluminium prices have risen 2.8% to $2,601 per tonne as of Friday, supported by macroeconomic tailwinds and firmer-than-expected supply–demand fundamentals, despite the rollout of newly imposed US aluminium tariffs and ongoing geopolitical uncertainty, the report said. "For the remainder of the year, we see risks to our forecast as broadly balanced but modestly skewed to the upside." Supply-side issues in the raw materials markets also have the scope to support prices, it added. In addition, the possibility of new tariffs on aluminium also continue to present a considerable risk that could unsettle markets and inject renewed volatility.

Higher prices will be mainly because of sustained demand from the construction, autos, and renewables sectors. Manufacturers will continue to increase aluminium intensity in vehicles, which will prove to be increasingly important to lightweight electric vehicles in order to extend vehicle range. "Additionally, renewable energy sources such as wind and solar power require significantly greater amounts of aluminium than conventional energy sources."

At 1447 IST, the most-active three-month aluminium contract on the London Metal Exchange was 0.1% lower at $2,620.5 per tonne.  End

US$1 = INR 88.10

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

Reported by Ashutosh Pati

Edited by Ashish Shirke

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