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According to the news base “Madan Nameh“, Eva Monti, an analyst at ING, stated in a report that aluminum prices have retreated from their recent highs despite new tensions in the Middle East. According to her, although geopolitical risks remain high,
the recent operational updates and improved supply expectations have led the market to assess the likelihood of a long-term disruption in aluminum supply as lower than before.
According to this report, regional tensions initially supported aluminum prices,
but after Emirates Global Aluminium announced progress in restoring operations at its Al Taweelah complex, prices fell and the market assessed the probability of a prolonged supply disruption as lower.
ING cited the biggest change compared to its previous estimate as an improved outlook for aluminum production in the Middle East.
According to EGA, production at its smelter has resumed and about 7 percent of pots have been brought back into production.
The bank believes that the recovery of capacities is proceeding faster than initial expectations.
China’s Role in Reducing Supply Concerns
Another part of this analysis points to increased aluminum exports from China.
Exports from China reached 630,000 tons in May, a 16 percent increase compared to the same period last year, helping improve physical inventory in markets outside China and reducing shortages.
Simultaneously, primary aluminum production in China hit a new record, reaching 3.89 million tons in May.
This indicates that Chinese smelting plants are operating at very high utilization rates, with limited room to increase production further.
Nonetheless, ING emphasized that China’s capacity to further increase supply is gradually becoming limited, and the country cannot fully compensate for any potential disruptions in other parts of the world.
Reduction in Market Deficit Estimate
Considering improved Middle East supply and increased Chinese production, ING has reduced its estimate of the aluminum market deficit for this year from 1.8 million tons to about 1.2 million tons.
This revision includes an increase of approximately 300,000 tons in Middle Eastern production in the second half of 2026 compared to the previous estimate, as well as growth in Chinese production.
The bank forecasts that the aluminum market will still face a deficit this year,
but will move towards a moderate surplus in 2027.
The continued return of production capacities in the Middle East and increased global supply are considered key factors in this reassessment.
As a result of these developments, ING lowered its aluminum price forecast and stated that the pace of global production recovery has been faster than previous estimates.