Aluminium is ready for a come-back
The outlook for aluminium prices is positive in 2024 as rising demand against tighter supply will likely push prices higher in 2024.
Prices are expected to recover from the hit they took during China’s extended lockdowns, according to analysis from Longview Economics. Platinum too is expected to recover with greater demand from the automotive sector.
Aluminium prices have traded in a relatively tight range since 2022 and are now hovering around US$2,050/tonne after peaking at US$4,000/tonne in early 2022.
Prices fell that year following extended Chinese lockdowns and have stayed down since.
Longview analyst Bradley Waddington believes the fundamental outlook is improving, with many of the key global producers reducing supply, while key sources of demand are improving.
On the supply side, the global aluminium production outlook is one of restricted supply. China’s aluminium production is capped, while supply from other producers is trending lower.
On the demand side, aircraft orders are rising as production rebounds from the pandemic lows; that trend is underpinned by strong global air traffic activity.
Longview expects this trend to persist, sustaining the demand for aluminium.
In China, EV production is accelerating. EVs use almost twice as much aluminium as conventional cars and rising EV sales in China, which account for over 40% of new car sales, will underpin greater demand for aluminium.
Elsewhere around the globe, the outlook is bullish, driven by the rising use of aluminium in various clean energy technologies.