Recently, Michael Widmer, a commodity strategist at Bank of America, shared his views on the aluminum market in a report. He predicts that although there is limited room for aluminum prices to rise in the short term, the aluminum market remains tight and aluminum prices are expected to continue to grow in the long term.

Widmer pointed out in his report that although there is limited room for aluminum prices to rise in the short term, the aluminum market is currently in a tense state, and once demand accelerates again, LME aluminum prices should rise again. He predicts that by 2025, the average price of aluminum will reach $3000 per ton, and the market will face a supply and demand gap of 2.1 million tons. This prediction not only demonstrates Widmer’s firm confidence in the future trend of the aluminum market, but also reflects the degree of tension in the global aluminum market supply and demand relationship.

Widmer’s optimistic predictions are based on multiple factors. Firstly, with the recovery of the global economy, especially in infrastructure construction and manufacturing, the demand for aluminum is expected to continue to grow. In addition, the rapid development of the new energy vehicle industry will also bring huge incremental demand to the aluminum market. The demand for aluminum in new energy vehicles is much higher than that of traditional vehicles, because aluminum has advantages such as lightweight, corrosion resistance, and good thermal conductivity, making it an indispensable material in the manufacturing of new energy vehicles.

Secondly, the increasingly strict global control of carbon emissions has also brought new opportunities to the aluminum market. Aluminum, as a lightweight material, will be more widely used in fields such as new energy vehicles. At the same time, the recycling rate of aluminum is relatively high, which is in line with the trend of global sustainable development. These factors all contribute to driving the growth of aluminum demand.

The trend of the aluminum market also faces some challenges. Recently, due to increased supply and demand entering the off-season of consumption, aluminum prices have experienced a certain decline. But Widmer believes that this pullback is temporary, and macroeconomic drivers and cost maintenance will provide support for aluminum prices. In addition, he also pointed out that as a major producer and consumer of aluminum, China’s shortage of electricity supply may further exacerbate the tension in the aluminum market.