Recently, JPMorgan 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 driven by the linkage effect of copper prices, aluminum prices are expected to climb to a high of $3000/ton in the first half of 2026. Starting from the second half of 2026, with the concentrated release of Indonesian aluminum production capacity, the market supply and demand pattern will reverse, and aluminum prices will face continuous pressure, which is expected to continue until 2027 and beyond.

Short term support: Magnetic pull of copper prices and resonance of supply and demand balance

JPMorgan analyzed in its report that the core driving force behind the rise in aluminum prices in the first half of 2026 is dual support. One is the relative balance of market supply and demand. Currently, there is no obvious supply demand mismatch in the global aluminum market, and inventory is within a reasonable range, laying the foundation for price increases. The second 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 often drives the market attention of similar varieties such as aluminum to increase, and at the same time transmits to the demand expectations of the industrial chain, forming price resonance.

Previously, JPMorgan Chase’s overall outlook for the metal market also leaned towards a structural bullish trend, particularly favoring copper, aluminum, and other commodities. It believed that supply side constraints and long-term demand brought about by energy transformation would provide support for it, which echoes the short-term upward forecast for the aluminum market this time. In addition, the bank has recently raised the target prices of leading companies such as China Aluminum and China Hongqiao, further confirming its optimistic judgment on the short-term prospects of the aluminum industry.

Long term pressure: Indonesia’s capacity release becomes a key variable

The report also emphasizes that 2026 will become a “turning point” in the supply and demand pattern of the aluminum market, with the core variable coming from the concentrated release of aluminum production capacity in Indonesia. JPMorgan Chase pointed out that Indonesia’s aluminum production capacity is currently at a “critical point”, and with a batch of new projects being put into operation in the second half of 2026, global aluminum supply will see a significant increase. From the perspective of industrial layout, multiple companies including Nanshan Aluminum have already established large scale alumina and electrolytic aluminum projects in Indonesia. Once production capacity is fully released, it will significantly change the global aluminum supply pattern.

JPMorgan predicts that the supply increase brought by Indonesia’s new production capacity will gradually manifest in the second half of 2026, when the market will shift from supply demand balance to oversupply, and aluminum prices will be under pressure to decline. Specifically, it is expected that aluminum prices may fall to around $2650/ton in the fourth quarter of 2026, with an average price of about $2800/ton for the whole year of 2026. The price center will further shift downwards in 2027. However, the report also suggests that potential supply interruption risks and a slowdown in the speed of overseas capacity restart may lead to actual supply shortages exceeding expectations, and continuous attention should be paid to the progress of capacity release.

For market participants, JPMorgan’s forecast provides important reference for industry chain enterprises and investors. 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 to cope with the risk of subsequent price fluctuations.