Aluminum Ingot Price Forecast May-June 2026: Tight Supply-Demand Balance Sustains High Volatility

Core Market Drivers

Supply-Side Constraints (Structural Tightness Persists)

1. China’s Production Ceiling: Domestic electrolytic aluminum capacity is capped at 45 million tons. As of March 2026, operating capacity reached 45.016 million tons (utilization rate: 99.24%), leaving less than 800,000 tons of expansion space. No new capacity is expected in 2026, with only 1-2% growth from capacity resumption and technological upgrades.​
2. Middle East Supply Shocks: Conflicts have disrupted 550,000 tons of confirmed production, with 2.8 million tons at risk of further cuts (5% of global capacity). The 1.6 million-ton/year EGA Taweelah smelter (UAE) faces a 12-month restoration period, creating a persistent supply gap through 2026.
3. Overseas Capacity Bottlenecks: European aluminum plants (2.33 million tons shut down since 2022) show no signs of restart due to high energy costs and CBAM policy pressures. Indonesian new capacity (725,000 tons in 2026) is delayed by 6-12 months due to power infrastructure shortages.

Demand-Side Dynamics (Structural Growth vs. Cyclical Weakness)

Demand Segment	Growth Rate (2026)	Key Impact
New Energy Vehicles (NEV)	30% (YoY)	22.5 million units sold globally; 187kg aluminum per vehicle (133% higher than ICE vehicles) → 4 million tons demand boost
Solar PV	15% (YoY)	665GW new installations → 12.63 million tons aluminum demand for frames/brackets.
Real Estate (China)	-3.7% (Q1 YoY)	Weak construction activity offsets support from affordable housing projects.
Industrial Manufacturing	2-3% (YoY)	Stable demand for aluminum profiles and foils.

Inventory Dichotomy (Domestic Glut vs. Overseas Shortage)

• China: Social inventory hit 1.48 million tons (5-year high) as of April 20, 2026, due to weak downstream off-take and lower molten aluminum direct supply ratio (72% vs. historical 75-80%)[superscript:3)].
• Global (LME): Inventory plummeted to 383,000 tons (20-year low), equivalent to only 2 days of global consumption[superscript:3)]. Logistics bottlenecks in the Strait of Hormuz exacerbate regional shortages.

Macroeconomic Factors

• US Dollar: Fed’s expected rate cuts in 2026 weaken the dollar, supporting commodity prices.
• Speculative Positioning: LME aluminum net long positions reach the 95th percentile (5-year range), limiting further upside momentum.

Price Forecast Table (May-June 2026)

Indicator	May 2026 Forecast	June 2026 Forecast	Data Source
LME Aluminum Spot Price (USD/ton)	3,300 – 3,500	3,200 – 3,450	Goldman Sachs (Baseline Scenario)
LME Aluminum 3-Month Futures (USD/ton)	3,250 – 3,450	3,150 – 3,400	JPMorgan Supply-Demand Model
SHFE Aluminum Main Contract (CNY/ton)	24,800 – 25,500	24,500 – 25,200	Domestic Inventory & Cost Analysis
Global Supply-Demand Gap (10k tons)	+80 – +100	+60 – +90	WBMS & Goldman Sachs
LME Inventory (10k tons)	37 – 39	36 – 38	LME Weekly Report
China Social Inventory (10k tons)	145 – 150	140 – 148	Mysteel Surve

Note: Upper bound assumes prolonged Middle East conflicts; lower bound reflects gradual inventory digestion in China.cto beatae vitae dicta sunt explicabo.

Risk Factors

Upside Risks

• Escalation of Middle East conflicts leading to further production cuts (e.g., UAE/Bahrain full shutdown).
• Surpassing expectations in NEV and solar PV installations driving demand.
• Supply chain disruptions from Strait of Hormuz tensions.

Downside Risks

• Earlier-than-expected release of Indonesian new capacity.
• Global GDP slowdown curbing industrial demand (1% GDP drop → 1.9% aluminum demand decline).
• Unplanned inventory destocking in China pressuring domestic prices.

Conclusion

In May-June 2026, aluminum ingot prices will remain in a high-volatility range supported by tight global supply. LME spot prices are likely to trade between ​

3,200−3,500/ton, while SHFE prices fluctuate around CNY 24,500-25,500/ton. The market will be dominated by three key tensions: Middle East supply losses vs. Chinese inventory overhang, new energy demand growth vs. traditional sector weakness, and short-term geopolitical risks vs. medium-term capacity expansion.​

For market participants, short-term traders should focus on LME inventory and Strait of Hormuz developments, while long-term buyers may consider staggered purchases amid price pullbacks. Key monitoring indicators include Middle East production recovery progress, China’s downstream operating rate, and Indonesian project commissioning timelines.

Data Sources: Goldman Sachs (March 2026), JPMorgan (April 2026), WBMS, LME, Mysteel, China Nonferrous Metals Industry Association