As expectations for interest rate cuts rise, the US dollar is under pressure, and aluminum prices have risen for seven consecutive days, reaching a new high since March
Before the Federal Reserve's interest rate meeting, aluminum prices rose for the seventh consecutive day, reaching USD 2,705 per ton, a new high since March. The market's expectations for the Federal Reserve to ease monetary policy have intensified, putting pressure on the dollar and driving up metal prices denominated in dollars. Bank of America predicts a supply gap of 292,000 tons in the aluminum market by 2026, with aluminum prices expected to rise to USD 3,000 per ton, primarily relying on a recovery in demand from Europe and the United States and China's continued strong aluminum demand
According to the Zhitong Finance APP, ahead of this week's significant Federal Reserve interest rate meeting, aluminum prices rose for the seventh consecutive trading day on Monday. Data showed that London aluminum prices rose by as much as 0.6% to USD 2,705 per ton on Monday, the highest level since March, before the gains narrowed, and it is expected to create the longest increase in over a year.
Investors are closely watching the Federal Reserve's interest rate decision on Wednesday. Against the backdrop of a softening labor market and the latest inflation roughly meeting expectations, market expectations for the Federal Reserve to ease monetary policy are growing. This has put pressure on the US dollar and boosted dollar-denominated metals, including aluminum. Additionally, aluminum prices have been supported in recent weeks due to a surge in extraction inventory applications, which has intensified ongoing concerns about supply.
It is worth mentioning that Bank of America pointed out last week that the global aluminum market will still maintain a surplus of 316,000 tons in 2025, but by 2026, this pattern will completely reverse, resulting in a supply gap of 292,000 tons, with aluminum prices expected to rise to USD 3,000 per ton in the fourth quarter of 2026.
Bank of America noted that the aluminum supply shortage in 2026 largely depends on the recovery of demand in Europe and the United States: American consumers have not yet fully borne the 50% aluminum import tariff, and competition for aluminum procurement is expected to intensify; the European market has shown signs of "bottoming out" in aluminum demand due to fiscal stimulus policies. Meanwhile, China, as the world's largest aluminum consumer, has consistently "withstood pressure"—purchases from power grids, solar panels, and automotive manufacturers have supported domestic consumption, leading to record-high aluminum demand in China. Bank of America added that global aluminum inventories have stabilized at multi-year lows, becoming a "hidden cornerstone" supporting aluminum prices
