Aluminum prices on the LME 3-Month surpassed $3,000 per metric ton, as expected by HARBOR at the beginning of last year. We continue to see prices, the report states, targeting the $3,300 level in the coming weeks or months, with $4,000 being a real possibility at some point within the year.
Aluminum prices reached $3,133 on January 6, a new three-and-a-half-year high, essentially breaking the $3,000 level in 2026, exactly as HARBOR predicted in April of last year while prices were still trading at $2,290 per ton.
LME 3M aluminum prices closed 2025 at $2,996 per million tons, marking a 17.4% increase on an annual basis. From a technical analysis standpoint, the door remains open for the continued rise of LME prices to reach levels of $4,000.
LME aluminum prices have increased by more than $700 per ton or 31% since April 2025. In April, LME prices were trading slightly below $2,300 and HARBOR predicted that a rally toward the $2,700-$2,750 zone would materialize before the end of 2025, as it did.
In May 2025, HARBOR also predicted that LME prices would target $3,000 by 2026 (as occurred this week).
HARBOR continues to expect stronger aluminum demand in the US and globally, as well as a tighter market in 2026. We continue to see a time-lagged recovery in end-user aluminum demand maturing in the coming quarters, amid improving US trade policy, better visibility on tariffs, strong investment projects in the US, global demand, inventory replenishment, fiscal stimulus packages, and interest rate reductions.
Furthermore, the physical market is expected to tighten in the coming quarters, given China's strict production limits.
Aluminum prices are of exceptional importance for Metlen, as they enable management to lock in profits for the coming years by taking advantage of the price surges.
Bank of America: Tripling of aluminum demand due to China in the coming years
Humanoid and non-humanoid robots are set to drive massive demand for energy, lithium, copper, and aluminum relative to the long-term average. Robot architecture is constructed from aluminum and other composite materials, and their power comes from lithium batteries, which contain aluminum and are recharged via copper cables. Robot intelligence requires data centers that consume significant energy and metals.
■ To put the potential scale of energy and metal demand into perspective, we estimate that 10 billion humanoids plus 10 billion non-humanoid robots (as predicted by Elon Musk by 2040, Reuters, Oct 29) would require a doubling of global energy production to be recharged.
The production of these robots may require 16x, 3.5x, and 3x the supply of lithium, aluminum, and copper respectively.
■ China very recently shifted capital allocation into the robotics sector (humanoid and non-humanoid), with direct support from President Xi, resulting in robot production growing by ~80% year-on-year. Service robot production in China has now reached an annual rate of 18-20 million, up from 10-11 million at the start of the year.
In the coming years, they expect a boom in capital allocation for robot production and cost reduction, similar to what happened during China's energy transition (which began in July 2020) and the shale oil revolution in the US.
Service robot production in China has increased by 8 million units in recent years, with production accelerating sharply in the last 6 months.
For Bank of America, the predicted prices for the first half of 2026 are at $2,900, in the third quarter at $3,000, and in the fourth at $3,300, while in 2027 they will rise to $3,500 and $4,000 in the bull case scenario.
JP Morgan: Market characteristics lead to a deficit
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China is reaching its production capacity limit, with exports already having decreased in 2025.
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Energy supply is more difficult (and expensive) for smelters, with competition from Artificial Intelligence driving up costs, as well as difficulties in securing long-term supply contracts.
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We see that aluminum will present a deficit in 2026, even with strong growth from India, with price risks "skewed" to the upside.
The problem of high energy costs makes it more demanding to restart idle capacity of 850 ktpa (thousand tons) in the US and Europe. It also threatens the operation of smelters where electricity contracts exist that must be renewed. According to the US Aluminum Association, smelters need contracts at $40/MWh.
JP Morgan Outlook:
Aluminum is higher than in 2022 and is at a record multiplier relative to alumina, which suggests strong profit margins for smelters. The price has already exceeded the 2026 Forecast of $2,750/ton (versus the estimate of $2,620/ton), but with the market looking forward to an increasingly tight 2026, prices could rise further.
Although our bull estimate is for $3,300, more supply disruptions will consolidate prices above $3,000/ton. It should be noted that the net market position is large in long contracts, meaning it views prices as bullish.
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