US bank Goldman Sachs has lowered its aluminium price forecast for this year and 2026 on the basis of a weaker global growth outlook caused by US trade tariff policy.
The US' 25pc tariff on aluminium imports and additional tariffs on imports from Canada, Mexico and China have slowed global growth. Further tariffs announced on 2 April on almost all countries, delayed now for 90 days, and forthcoming announced tariffs on electronic and pharmaceutical goods are likely to further sap global economic activity.
Goldman Sachs expects London Metal Exchange (LME) aluminium prices to average $2,000/t in the third quarter before climbing to $2,300/t by the end of this year, down from its previous forecast of $2,650/t at the end of 2025. Prices are then expected to rebound in 2026 but by less than previously forecast, reaching $2,720/t in December next year from previous forecasts of $3,100/t.
"At $2,000/t — equivalent to the 75th percentile of our aluminium smelter cost curve — we believe that the highest-cost producers will temporarily come under margin pressure, but we do not need closures and expect a demand-driven price recovery thereafter," Goldman Sachs said.
Price expectations have fallen owing to the bank downgrading its aluminium demand growth forecast to 1.1-2.3pc over 2025-26 from 2.4-2.6pc previously, which would lead to an expected global aluminium market surplus of 580,000t in 2025, up from the bank's previous forecast of a 76,000t deficit.
The bank added that risks to this forecast are weighted to the downside, as demand could fall further should the trade war escalate. Prices below $2,000/t would probably lead to substantial output curtailments to rebalance the market, it added, although prices could remain lower for longer than expected.
