Goldman Sachs Cuts Aluminum Price Forecast, Yet Aluminum Prices Rebound 1.1%
Miles Bennett
Goldman Sachs slashed its 2026 global aluminium deficit forecast from 720,000 tonnes to just 100,000 — yet LME aluminium rallied 1.1% past $3,120 the same day, as Chinese funds front-ran producer earnings ahead of mid-year results.
What did aluminium prices do?
LME aluminium futures rose as much as 1.1% intraday, touching above $3,120 per tonne, before paring gains to 0.8% at $3,115.
The move came off a near four-month low — a technical bounce after extended selling.
Goldman published its downgrade the same day, putting price action and the bank's view in direct conflict.
Who was buying — and why go against Goldman?
Wu Kunjin, head of base-metals research at Minsheng Futures, told Bloomberg that some Chinese funds shifted capital into metals equities and futures on Monday.
Two drivers: expectations that Chinese aluminium producers will report solid first-half results, and that Q2 margins improved sharply after Middle East supply disruptions lifted prices.
This means → the rally is not a long-term bullish call on aluminium — it is a front-run on near-term earnings, betting producers will deliver strong half-year numbers.
What exactly did Goldman change?
Supply-demand balance: the 2026 global deficit was cut from 720,000 tonnes to 100,000; the 2027 surplus was raised from 590,000 tonnes to roughly 1.5 million.
Price targets: Q4 2026 LME aluminium was lowered from $3,200 to $2,950 per tonne; the 2027 full-year average from $2,950 to $2,700.
In plain terms = Goldman now sees aluminium shifting from "tight supply" to "nearing oversupply" — and the projected glut is far larger than previously expected.
Why such a large revision?
The core driver is Middle East supply returning faster than expected.
Emirates Global Aluminium — the region's largest producer — said last week it plans to accelerate the restart of damaged facilities in Abu Dhabi.
This reflects a broader shift: the U.S.–Iran conflict that drove aluminium higher is unwinding — with a peace deal in place, the market's focus has moved from "supply disruption" to "how fast does capacity come back."
What to watch next?
Near-term variable: whether Chinese producers' half-year results actually deliver the margin improvement the market is pricing in — if they disappoint, front-running capital could exit fast.
Medium-term variable: the pace of Middle East capacity restarts — if supply returns faster than Goldman expects, inventory builds will arrive sooner, adding further downside pressure on prices.
Aluminium stocks rallied in tandem on Monday: Century Aluminum +4.5%, Alcoa +2.3%, Constellium +2.3%, Kaiser Aluminum +1.9%.
Content is for reference only, not financial advice.