Aluminium boots 2025 outlook on supply deficit
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Aluminium is shaping up to be the top-performing base metal in 2025, with analysts projecting a 6.3% price increase amid expectations of a supply shortfall. The latest Reuters January Base Metals Poll revealed growing conviction in tightening market conditions, reinforcing the bullish case for the light metal.
Aluminium Prices Set to Rise on Structural Constraints
The LME aluminium cash price averaged $2,450 per ton in 2024, marking a 4.9% annual gain. This year, analysts expect a further rise to $2,573.50, with 2026 projections reaching $2,626. The key driver behind this sustained upside is a shift from oversupply (100,000 tons) to a projected 8,000-ton deficit in 2025, widening to 365,000 tons by 2026. China’s production cap of 45 million tons remains a key supply constraint, as the world’s largest aluminium producer has little room for capacity expansion. With global demand growing, the lack of additional smelting capacity raises concerns about how the supply gap will be met.
Zinc’s Rally Expected to Lose Momentum
Zinc prices are forecast to rise 4.2% to $2,895 per ton in 2025, making it the second-best performer among LME base metals. Analysts revised their outlook higher from October’s poll due to an unexpectedly tight concentrate supply. However, this squeeze is not expected to last. Mine output is set to recover, with analysts projecting weaker zinc prices beyond 2025, making it the only base metal expected to decline next year.
Copper Faces Headwinds from Trade Tensions
Copper prices are expected to increase 3% to $9,425 per ton, but analysts have scaled back their bullish expectations, cutting their median forecast by 4.8% from the previous quarter. The US-China tariff conflict remains a major uncertainty, particularly as President Trump’s 10% levy on Chinese imports threatens to disrupt demand from China, the world’s largest copper consumer. Investors will closely watch China’s manufacturing sector recovery to assess the demand outlook.
Nickel Recovery Hinges on Indonesian Supply Cuts
Despite falling 22% in 2024, nickel prices are projected to stabilize at $16,265 per ton this year, with a recovery to $17,637 in 2026. The key question remains whether Indonesia, the world’s top producer, will curb production growth to support prices. While oversupply is still a concern, analysts believe the downside is limited, with nickel expected to bottom out at $15,550 in Q1 2025 before trending higher later in the year.
Tin Outlook: High Volatility, Low Consensus
Tin remains the most unpredictable base metal, with price forecasts ranging from $23,750 to $33,000 per ton for 2025, reflecting the lack of clarity in supply and demand dynamics. The dispersion grows further into 2026, with estimates between $21,000 and $37,000.
Market Outlook: Aluminium and Zinc Take the Lead
With structural supply constraints and China’s capacity cap, aluminium is the clear bullish pick for 2025, while zinc’s recent strength may fade as supply recovers. Copper’s sensitivity to trade policies makes it a high-risk play, while nickel and tin face long-term volatility. As macroeconomic uncertainties persist, investors will watch for policy shifts, demand trends, and supply adjustments to shape the LME metals market in 2025 and beyond.
Aluminium Prices Set to Rise on Structural Constraints
The LME aluminium cash price averaged $2,450 per ton in 2024, marking a 4.9% annual gain. This year, analysts expect a further rise to $2,573.50, with 2026 projections reaching $2,626. The key driver behind this sustained upside is a shift from oversupply (100,000 tons) to a projected 8,000-ton deficit in 2025, widening to 365,000 tons by 2026. China’s production cap of 45 million tons remains a key supply constraint, as the world’s largest aluminium producer has little room for capacity expansion. With global demand growing, the lack of additional smelting capacity raises concerns about how the supply gap will be met.
Zinc’s Rally Expected to Lose Momentum
Zinc prices are forecast to rise 4.2% to $2,895 per ton in 2025, making it the second-best performer among LME base metals. Analysts revised their outlook higher from October’s poll due to an unexpectedly tight concentrate supply. However, this squeeze is not expected to last. Mine output is set to recover, with analysts projecting weaker zinc prices beyond 2025, making it the only base metal expected to decline next year.
Copper Faces Headwinds from Trade Tensions
Copper prices are expected to increase 3% to $9,425 per ton, but analysts have scaled back their bullish expectations, cutting their median forecast by 4.8% from the previous quarter. The US-China tariff conflict remains a major uncertainty, particularly as President Trump’s 10% levy on Chinese imports threatens to disrupt demand from China, the world’s largest copper consumer. Investors will closely watch China’s manufacturing sector recovery to assess the demand outlook.
Nickel Recovery Hinges on Indonesian Supply Cuts
Despite falling 22% in 2024, nickel prices are projected to stabilize at $16,265 per ton this year, with a recovery to $17,637 in 2026. The key question remains whether Indonesia, the world’s top producer, will curb production growth to support prices. While oversupply is still a concern, analysts believe the downside is limited, with nickel expected to bottom out at $15,550 in Q1 2025 before trending higher later in the year.
Tin Outlook: High Volatility, Low Consensus
Tin remains the most unpredictable base metal, with price forecasts ranging from $23,750 to $33,000 per ton for 2025, reflecting the lack of clarity in supply and demand dynamics. The dispersion grows further into 2026, with estimates between $21,000 and $37,000.
Market Outlook: Aluminium and Zinc Take the Lead
With structural supply constraints and China’s capacity cap, aluminium is the clear bullish pick for 2025, while zinc’s recent strength may fade as supply recovers. Copper’s sensitivity to trade policies makes it a high-risk play, while nickel and tin face long-term volatility. As macroeconomic uncertainties persist, investors will watch for policy shifts, demand trends, and supply adjustments to shape the LME metals market in 2025 and beyond.