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Aluminium: Deficit persists despite higher output – ING

ING strategists Warren Patterson and Ewa Manthey say global Aluminium output is rising, including in China, Europe and Asia ex-China, but the market remains in deficit. They estimate around 3mt of capacity has been lost to Middle East disruptions and is unlikely to return quickly. The team continues to forecast a sizeable global Aluminium deficit this year.

Supply disruptions keep market tight

"In other metals, data from the International Aluminium Institute (IAI) showed that global primary aluminium output rose 3.5% month-on-month to 6.2mt in May. This reflects higher production across most major regions. "

"However, the aluminium market is still expected to remain in deficit this year. Supply disruptions linked to the Middle East conflict have removed an estimated 3mt of production from the market."

" Lost capacity is unlikely to return quickly given the lengthy restart process for smelters. We continue to forecast a global aluminium deficit of around 1.8mt this year."

"China's aluminium production rose 2% YoY to 3.8mt in May as stronger margins supported smelter utilisation rates. Aluminium exports continued to increase, rising 16% YoY in May, supported by stronger international prices. However, further production growth remains constrained by government capacity caps."

"Aluminium production increased across Europe and Asia ex-China in May, while Gulf output remained more than 35% below year-ago levels due to ongoing supply disruptions linked to the Iran conflict."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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