Goldman Sachs Sees Aluminium Prices Falling as Global Surplus Expands by Amit Gupta, Kedia Advisory
Goldman Sachs has revised its aluminium outlook, predicting a significant price decline over the next two years as global supply outpaces demand. The bank expects aluminium prices to drop from the current $2,700 per ton to around $2,350 by Q4 2026, citing rising Indonesian production and expanding market surpluses. While demand from sectors like construction and EV manufacturing remains steady, oversupply pressures are expected to cap gains through 2027. Goldman maintains aluminium prices may not recover to $2,650 until 2030, recommending short positions in December 2026 LME aluminium contracts currently trading well above forecast levels.
Key Highlights
* Aluminium prices forecasted to drop to $2,350/ton by late 2026.
* Global surplus expected to expand from 400,000 to 2 million tons by 2027.
* Indonesian production growth seen as key driver of oversupply.
* Goldman Sachs opens short trade on Dec 2026 LME aluminium futures.
* Prices not expected to recover to $2,650 until around 2030.
Goldman Sachs has taken a bearish stance on aluminium, cutting its price outlook as global production continues to outpace demand. The bank now forecasts London Metal Exchange (LME) aluminium prices to decline from the current $2,700 per ton to $2,350 by the fourth quarter of 2026, revising its earlier low of $2,100 for March 2026.
According to the report, the global aluminium market surplus is expected to widen from approximately 400,000 tons in 2025 to nearly 1.5–2.0 million tons by 2027. This oversupply is being driven largely by increasing production in Indonesia, whose new smelter capacity is adding significant volume to the global market.
While industrial and clean-energy demand for aluminium remains strong, especially in electric vehicles and renewable infrastructure, these positive trends are insufficient to offset the expanding supply. Goldman Sachs analysts noted that the surge in Indonesian output and slowing Chinese demand could continue to suppress prices over the next several years.
In a strategic move, the bank has opened a trade recommendation to short the December 2026 LME aluminium contract, currently trading near $2,750 per ton—about 17% above Goldman’s forecast. The firm expects that increased inventories and a strong U.S. dollar will continue to weigh on the market through 2027.
Despite the short-term weakness, Goldman sees long-term recovery potential by the decade’s end as surplus conditions normalize and demand for lightweight metals strengthens in green manufacturing.
Finally, Goldman Sachs expects aluminium to face prolonged pressure from oversupply, with prices stabilizing only after 2027 as demand gradually catches up to expanding global production.
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