Aluminum Facing 'Very Large Supply Hole,' JPM Says

Summary

Greg Shearer of JPMorgan discusses the aluminum market, highlighting the largest supply deficit since 2000. He expects prices to rise to $4,000 per ton near term and stay elevated around $3,500 through late 2026, though demand destruction may occur. A recession scenario could push prices down to $2,800.

• JPMorgan forecasts a 2 million metric ton aluminum supply deficit (2.6% of the market).
• The deficit is the largest relative shortfall since 2000.
• Smelter restart times (up to a year) create a 'black hole' effect on supply.
• Near-term aluminum price target is $4,000 per metric ton.
• Prices are expected to settle around $3,500 in the second half of 2026.
• High prices may cause demand destruction and substitution toward plastics.
• A recession scenario could drive aluminum prices to approximately $2,800.
• The Strait of Hormuz disruption is a key risk but not the only driver.