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Aluminum has already faced a reduction in supply today. Accordingly, analysts predict growth.
While gold prices are trying to find some direction, investors' attention is switching to the aluminum market, as speculative momentum helped raise prices on the London Metal Exchange to $ 3,000 per ton.
They remain high despite the fact that prices have fallen from multi-year highs.
Some experts believe that this is only the beginning of a more significant rally. Citi analysts said that the price may increase to $ 3,100 per ton over the next 12 months because a reduction in China's production will lead to a deficit in the market of 1.1 million tons by the end of 2021.
The rising concerns about global economic growth are creating obstacles for many commodities; however, the aluminum market has been able to reverse this trend. Experts note that the growing supply crisis leads to an increase in aluminum prices.
Daniel Briesemann, an expert on non-ferrous metals at Commerzbank, noted in his report published on Wednesday that although aluminum production in China is slightly higher this year, amounting to 3.16 million tons, there has been a drop in production in the country for the last four months in a row.
Analysts at Bank of America said that the fall in inventories led to the fact that global aluminum stocks were below long-term trends. They confirmed their optimistic forecast for aluminum due to supply problems but added that the price may move too high, too fast, and there is a growing risk of a sharp pullback.
Commodity analysts at TD Securities are also optimistic about the base metal, noting a growing reduction in supply in the market.
TDS said that they consider aluminum to be the leader in the non-ferrous metals sector with prices in the future exceeding $ 3,000 per ton, especially with a significant reduction in production in China. Accordingly, the import of primary metals may become more frequent on the world market.
All analysts are optimistic that aluminum will be able to maintain the current upward trend.
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