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Topic: Supply shortage is difficult to solve, aluminum prices continue to rise, Wall Street raises aluminum prices to over US$3,000/ton

Topic: Supply shortage is difficult to solve, aluminum prices continue to rise, Wall Street raises aluminum prices to over US$3,000/ton

2021-09-13

At the Harbor Aluminum Summit held in Chicago from September 8th to 10th, local time, many attendees said that supply shortages will continue to plague the industry for most of next year, and some attendees even predict that it may take up to five years. It will take years to solve the supply problem.

"For us, the current situation is very chaotic. Unfortunately, when we look forward to 2022, we don't think this situation will disappear anytime soon," Mike Keown, CEO of Commonwealth Rolled Products, said at the summit. Said, “For us, the current difficult situation has just begun, which will keep us vigilant.”

Due to soaring demand, shipping bottlenecks and production restrictions in Asia, aluminum prices have risen by 48% this year, which has triggered concerns about inflation in the market, and consumer goods producers are facing the double attack of raw material shortages and sharp increases in costs.

Jorge Vazquez, founder and managing director of Harbour Intelligence, an aluminum consulting company, predicts that the average price of aluminum will reach US$2,570/ton in 2022, which is about 9% higher than the average price of benchmark aluminum futures traded in London so far this year. He also expects that the CME Group Aluminum Midwest transaction premium will rise to a record high of 40 cents/lb in the fourth quarter, an increase of 185% over the same period last year.

As aluminum prices continue to rise, Goldman Sachs and Citigroup have raised their aluminum price forecasts. Goldman Sachs predicts that the outlook for the global supply chain may deteriorate, and the price of aluminum futures is expected to rise further, and the target price of aluminum futures for the next 12 months is raised to US$3,200/ton. Citigroup predicts that in the next three months, aluminum prices may rise to US$2,900/ton, and 6-12-month aluminum prices may rise to US$3,100/ton, as aluminum prices will transition from a cyclical bull market to a structural bull market. The average price of aluminum is expected to be US$2,475