Recently, JPMorgan Chase released its 2026/27 Global Aluminum Market Outlook report, which clearly stated that the aluminum market will show a phased trend of “first rising and then falling” in the next two years. The core forecast of the report shows that due to multiple favorable factors resonating, aluminum prices are expected to approach a high of $3000 per ton in the first quarter of 2026. However, with the concentrated release of Indonesian aluminum production capacity, prices will continue to face pressure from the second half of the year.
JPMorgan analyzed in its report that the core driving force behind the rise in aluminum prices in the first half of 2026 is triple support. One of them is the “magnetic” pulling effect brought about by the rise in copper prices. As an industrial metal with strong linkage in the commodity market, the rise in copper prices not only increases the market attention of the entire industrial metal sector, but also forms price resonance through the transmission of industry chain demand expectations. The second is the supply-demand balance pattern in the global aluminum market, where there is currently no significant supply-demand mismatch and inventory is maintained within a reasonable range, laying a solid foundation for price increases. The third is the potential risk on the short-term supply side, where disturbances in local production capacity may lead to temporary supply contraction, further amplifying the driving force of price increases.
This prediction is consistent with JPMorgan’s overall assessment of the metal market. The bank had previously expressed a structural bullish view on the metal market in 2026/27, particularly bullish on industrial metals such as copper and aluminum, believing that supply side constraints and long-term demand brought about by energy transformation will form sustained support. Market data shows that the bank has recently raised target prices for industry leaders such as China Aluminum and China Hongqiao, further confirming its optimistic attitude towards the short-term prospects of the aluminum industry.
The report also emphasizes a potential turning point in the market landscape – the concentrated release of Indonesian aluminum production capacity. JPMorgan Chase pointed out that Indonesia, with its abundant bauxite reserves and energy cost advantages, has become an emerging production area for the global aluminum industry, and its capacity growth is at a “critical point”. It will usher in a wave of concentrated production in 2026. According to statistics, there are about 4 new electrolytic aluminum projects expected to be put into operation in Indonesia in 2026, involving a total built production capacity of 4.25 million tons. After production, the country’s total built production capacity is expected to exceed 5 million tons. Among them, the 400000 ton production capacity of the Juwan project is planned to be put into operation in the second quarter of 2026, and the 500000 ton production capacity of PT KAI Phase I is ready for production.
However, the certainty of Indonesia’s capacity release is still constrained by power supply. As a high energy consuming industry, the DC power consumption per ton of electrolytic aluminum reaches 13000-14500kWh, while the proportion of coal power in Indonesia’s current power structure is still 56%, and the development progress of renewable energy lags behind the planning. Although PT KAI Phase I, Juwan and other self owned coal-fired power projects have high certainty of being put into operation, enterprises such as Nanshan Aluminum have high costs of purchasing green electricity externally, and some projects rely on hydropower resources that will not be connected to the grid until after 2026, which may lead to delayed capacity deployment. JPMorgan predicts that the actual impact of this supply increase will gradually become apparent in the second half of 2026, when the market may shift from supply-demand balance to oversupply, and aluminum prices will be under pressure to decline. It is expected that aluminum prices may fall to around $2650/ton in the fourth quarter of 2026, with an average annual price of about $2800/ton.
Industry insiders suggest that upstream production enterprises can seize the opportunity of high prices in the first half of 2026 to optimize hedging strategies, while downstream processing enterprises need to plan the pace of raw material procurement in advance and closely monitor the impact of key variables such as Indonesia’s capacity release progress and global power supply on aluminum prices. In addition, Morgan Stanley and other institutions have recently released research reports stating that the surge in energy storage demand and global power shortages may lead to an earlier shortage of aluminum market supply, complementing JPMorgan’s “first rising and then suppressing” view, highlighting the complexity and uncertainty of the aluminum market pattern in 2026.
Post time: Nov-28-2025