Global aluminium short-term outlook May 2022

The official LME cash price traded below US$3000/t during the month, wiping out the gains made during 2022. Market sentiment has deteriorated over the past few weeks on growing concerns over the outlook for demand, particularly in China. At the same time, the physical market is starting to turn in Europe and there are growing signs that offtake in the US may have peaked. Premia are still at elevated levels but are now starting to retrace lower levels. Against this, metal supply expansion in the world ex-China remains subdued with a risk of further cutbacks in Europe. Indeed, the EU’s proposed phasing out of Russian oil imports and the possibility of further disruptions to gas supplies will keep prices supported above US$2650/t over the very short-term.