Aluminum Facing 'Very Large Supply Hole,' JPM Says

• Expected aluminum deficit of just under 2 million metric tons, representing 2.6% of the market and the largest relative deficit since 2000.
• Anticipated loss of 2.4 million metric tons of Middle East supply this year, contributing to a 'black hole' in supply.
• Near-term price outlook for aluminum is towards $4,000 per metric ton, with elevated prices likely for a few months to a quarter before demand destruction or substitution (e.g., to plastics) might occur.

JPMorgan's Greg Shearer discusses a significant aluminum supply deficit, forecasting prices to rise towards $4,000 per metric ton in the near term. This deficit, the largest since 2000, is driven by Middle East supply disruptions and lean inventory buffers. While demand destruction is expected at higher price levels, the market remains tight for the next few months.