Aluminum prices rose in March. What is the outlook for the future market?

What is the evolving supply and demand pattern behind the sharp rise in aluminum prices?

【Global Network Finance Comprehensive Report】 Recently, the London Metal Exchange (LME) aluminum futures prices have surged significantly. Wind data shows that in March, LME aluminum futures prices increased by over 9% in total. Since this week, as of the morning close on April 1, LME aluminum futures prices have risen by more than 5%, and the main contract for Shanghai aluminum has increased by over 3%.

In terms of inventory, as of March 31, SMM statistics show that domestic electrolytic aluminum ingot social inventory is 1.37M tons, a change of 24k tons from the previous period; warehouse receipt inventory is 416,607 tons, a change of 4,155 tons from the previous trading day; LME aluminum inventory is 416,775 tons, a change of -1,900 tons from the previous trading day. Huatai Futures analysis indicates that overseas consumption has not been substantially affected, with overseas inventories still declining. Domestic aluminum bar inventories are decreasing rapidly, and aluminum alloy inventories are also declining, laying the foundation for later aluminum ingot destocking. The long-term fundamentals for supply and demand and macro expectations remain optimistic.

Additionally, the aforementioned research report mentions that the supply and demand for alumina still maintain an oversupply, with overall social inventories still slightly increasing. New capacity in Guangxi has come into production, smelting still remains profitable, and the oversupply pattern is unlikely to change in the short term. In the short term, alumina prices fluctuate with crude oil prices, and reduced freight volatility weakens cost support. In the long term, price centers are expected to rise due to raw material disturbances.

CITIC Futures analysis states that, from a medium-term perspective, structural growth drivers remain evident, with strong momentum in energy storage and power grid sectors expected to continue until 2026. Aluminum prices are expected to remain volatile but tend to trend upward. For the second quarter, the main contracts may trade within a range of 22,000 to 28,000 yuan per ton.

Goldman Sachs recently pointed out in a research report that a severe supply gap has appeared in the global aluminum market. While weakening demand offsets the impact of supply shortages, aluminum prices are supported in the short term but are expected to decline in the medium to long term. The global aluminum supply gap will expand to 2 million tons in the second quarter, and the average LME aluminum price in 2026 is projected to reach $3,400 per ton. (Wen Hui)