Bernstein has left its aluminium price outlook unchanged for the second half of 2026, maintaining a forecast of $3,100 per ton despite improving supply conditions following the reopening of shipping through the Strait of Hormuz and a faster recovery in Middle Eastern production.
Geopolitical Risks Fade but Supply Remains Tight
Aluminium prices rallied between March and May as concerns over the Strait of Hormuz threatened both aluminium exports and the flow of key raw materials into the market. Since the ceasefire and the resumption of maritime traffic, much of that geopolitical premium has disappeared, although physical supply remains tighter than it was before the conflict.
Emirates Global Aluminium (EGA) said its Al Taweelah smelter, which has annual production capacity of 1.6 million tons, is returning to operation sooner than expected. The company stated that “a return to pre-crisis shipment levels is expected, based on current conditions, to require the re-opening of the Strait,” while warning that a full recovery may still take up to a year.
Chinese Production Continues to Grow
Bernstein also highlighted China’s ongoing capacity expansion, with an additional 740,000 tons of annual aluminium smelting capacity expected to come online this year. That would lift total Chinese production to approximately 45.3 million tons.
While export-oriented manufacturing in China has remained resilient, domestic demand continues to be constrained by weakness in the property and construction sectors. Meanwhile, manufacturing activity has stabilised in Europe, Japan and the United States, although overall demand remains relatively soft.
Prices Expected to Stay Above $3,000
According to Bernstein, aluminium producers continue to benefit from margins that remain above historical mid-cycle averages.
The firm expects the global aluminium market to remain in deficit throughout 2026, supporting prices above $3,000 per ton before gradually returning toward longer-term equilibrium levels.
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