Goldman Sachs lifts first-half 2026 aluminum price forecast, adjusts surplus outlook

Jan 27 (Reuters) - Goldman Sachs on Tuesday raised its first-half 2026 London Metal Exchange aluminum price forecast to $3,150 per tonne from $2,575, citing a balanced global market that has supported investor confidence without triggering a rapid production surge.

The investment bank also increased its fourth-quarter 2026 forecast to $2,500 per tonne from $2,350 but maintained its 2027 projection at $2,400.

Goldman revised its 2026 market surplus to 0.8 million tonnes from 1.1 million, retained the 2027 surplus at 1.6 million, and raised its 2028 surplus forecast to 2.3 million, anticipating higher supply and reduced demand from solar and construction sectors in China.

LME aluminium CMAL3 was trading at $3,180 per tonne as of 1517 GMT after touching nearly a three-year high on Monday. MET/L

The metal is widely used in transport, construction, packaging and electrical applications.

Goldman Sachs attributed the hike in forecasts to three key factors - low global aluminum inventories, doubts over power availability for new smelters in Indonesia, and firm global demand growth driven by electric vehicles and grid expansion.

However, "we do not expect the price to remain above $3,000, and in 2026 we forecast an acceleration in aluminium supply growth to coincide with a slowdown in global demand growth," the bank added.

Goldman said slowing automotive production growth and a contraction in solar module production would further weigh on demand.