Investing.com -- Bernstein analysts project a stable outlook for aluminum prices, with limited scope for major gains in the years ahead.
In a recent report, the brokerage forecasts a moderate rise of 10–15% from current price levels, aligning with where the market has hovered for much of 2025.
The global aluminum market is expected to remain broadly balanced over the next decade. Bernstein estimates that demand will grow at an annual rate of 2.1% through 2040, fueled by building and construction, autos, and electrical transmission sectors.
Supply is forecast to grow at a slightly slower pace of 1.6% annually, with recycled (secondary) production rising more rapidly at 4.3%.
“Combined with a well-balanced market,” analysts at Bernstein said, “we don’t see much structural upside potential for aluminium.”
Bernstein’s base case price forecast stands at $2,650 per ton through 2029, reflecting expectations of midcycle profitability.
Scenario modeling suggests prices could range from a low of $2,491 to a high of $3,262 in that period.
In the short term, prices are expected to follow sentiment around China, the world’s dominant aluminum producer and consumer. Stimulus announcements and signs of economic recovery remain key to near-term moves.
Policy shifts are also shaping regional pricing. The introduction of a 35% tariff on aluminum imports into the U.S. has pushed the Midwest premium higher while weakening the Rotterdam premium in Europe.
Bernstein notes that while this has local effects, it does not significantly alter the global supply-demand balance.
On the supply side, the aluminum sector faces long-term structural challenges. Aging smelters some in operation since the 1980s will need to be replaced, potentially lowering production costs.
However, Bernstein sees limited investment appetite for large-scale new capacity, especially in the U.S., where high energy and labor costs make smelter economics less attractive compared to Canada.
Meanwhile, efforts to reduce the carbon intensity of aluminum production are expected to proceed slowly.
While Europe has implemented a carbon border tax, Bernstein argues its global impact will be limited.
Most of Europe’s demand can be met with existing low-carbon supply, and the high cost of replacing coal-based power remains a barrier to widespread decarbonization.
Recycling continues to grow in importance, with secondary aluminum production projected to gain market share as scrap supply increases.
While contamination limits its use in high-spec sectors, recycled aluminum now accounts for about a quarter of global output, and this share is expected to rise steadily.