Will aluminium supply respond as demand falters?

The aluminium market plunged into turmoil as efforts to contain the coronavirus led to a precipitous drop in demand this year. With reduced demand, surpluses continued to build as smelters churned out metal despite the widespread shutdown of plants producing semi-finished products.

China was the first country to impose and exit lockdown measures earlier this year, and its emergence from lockdown shows positive signs of recovery in the industrial sector. Attention now shifts to the rest of the world and the planned phased recovery of major economies. The pace of recovery will be slow, and the market will accumulate record surpluses over the next couple of years as a result.

The message is clear: despite the tentative signs of demand recovery in some markets, significant production cuts are needed to bring the aluminium market back to balance.

Join our upcoming webinar where Ami Shivkar and Xinlin Chen will discuss our latest aluminium market outlook, including:

• China's domestic market rebounds
• Global aluminium market imbalance: Surplus widens on demand slump
• Assessing (the lack of) supply response: Greenfield projects commence even as high cost smelters cut output