Aluminium prices have corrected by almost 20% from their recent highs. Price action looks extreme bearish for now, but we believe the bull market for producer margins & price is yet not completely broken. Aluminium remains bullish in the macro and geopolitical wings, with additional risks around bauxite supply. As such, it is not an especially attractive bear trade from current levels. Aluminium works in the wings – whether through renewed geopolitical disruption or a more dovish macro backdrop. We see prices bottoming over the coming month or so and recovering into September–December towards $3,300/t from current $3,090/t and possibly $3,500/t by March’27. But if there is a Russia Ukraine deal any time soon then premiums might reduce though modestly bullish for LME Aluminium.
