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Goldman Sachs raises its second-half 2025 aluminum forecast to $2.280/t

Goldman Sachs raised its forecast of aluminium prices for the second half 2025 from $140 per metric tonne to $2,280, citing smaller than expected surpluses on the market. However, they expect prices to fall in early 2026.

The bank stated that the impact of trade wars on global activity was less than expected. This led it to increase its global aluminium growth forecast for 2025 from 1.1% to 1.8%.

Donald Trump, the U.S. president, announced on Friday that he would increase import tariffs from 25% to 50%. Around half of the aluminium used for packaging, construction and transport in the United States is imported.

As of 1421 GMT, the benchmark three-month aluminum on London Metal Exchange had increased by 0.8% to $2,463 per ton.

Goldman Sachs predicts that aluminium prices will fall to a minimum of $2,100 a ton by early 2026. It forecasts that prices will average $2230 in 2026, and $2,500 by 2027. This is down from previous estimates of $2540 and $2800.

Goldman Sachs has announced that three 0.5 MTPA smelters are expected to be operational in Indonesia by mid-2026. This is earlier than originally anticipated.

The company expects a stronger production will result in the biggest surplus since 2020, a surplus of 1 million tons in 2026.

The bank stated that "Cost deflation" will also put downward pressure on the price of aluminium through 2026 as the alumina and the energy prices continue to be weak and limit the sustained rise in aluminium prices.

The bank's 2026 forecast was maintained, but its 2027 projection was lowered to reflect a slower growth of solar installations in China following recent policy adjustments. (Reporting by Anushree Mukherjee in Bengaluru. (Editing by Tomasz Janowski and Mark Potter).

(source: Reuters)