At the S&P Aluminum Symposium held in Fort Lauderdale, Florida, from January 26-28, Karen Norton, principal aluminum analyst at S&P Global Commodity Insights, presented key predictions for the aluminum market. Norton indicated that the aluminum market will experience a modest surplus in 2025. It will then transition into a deficit in 2026, signaling shifts in supply and demand dynamics.

Aluminum Market Outlook for 2025 and Beyond

In 2024, the global aluminum market is expected to see a small surplus of 100,000 metric tons. However, this surplus will significantly decline in 2025, narrowing to just 32,000 metric tons. The London Metal Exchange (LME) price for aluminum is forecasted to stabilize at $2,595 per metric ton in 2025. Looking further into the future, the market is projected to shift into deficit by 2026. The shortfall will grow to 123,000 metric tons. By 2027, the deficit is expected to reach 415,000 metric tons, with the LME price increasing to $2,702 per metric ton.

Despite these supply-demand shifts, demand growth is predicted to be slower in 2025 than in 2024. This slowdown is largely due to slower global GDP growth and broader macroeconomic factors. Norton described the market as being in a “muted environment,” with demand tracking closely with production.

Impact of Trade Tensions on Aluminum Pricing

The ongoing trade tensions, particularly in the U.S. with the potential for new tariffs, have raised concerns. Norton noted that although the aluminum market has not fully priced in the possible impact of tariffs, the threat has led to a significant boost in the U.S. Midwest Aluminum Premium. As of late January, the premium reached an 18-month high of over 24 cents per pound. With Canada accounting for 70% of U.S. primary aluminum imports, the threat of tariffs remains a key point of uncertainty. Nonetheless, many industry observers are adopting a “wait-and-see” stance on its potential consequences.