The Iranian strikes dated March 28 on the Gulf sites of Emirates Global Aluminium (EGA) and Aluminium Bahrain (Alba) have brought on a new outlook on the aluminium market trend. On Tuesday, Goldman Sachs raised its London Metal Exchange (LME) aluminium price forecast from USD 3,200 to USD 3,450 per tonne for the second quarter of 2026. Amid the prevailing supply crunch due to the Strait of Hormuz closure, the price revision results from an intensified market vulnerability, the smelter damages leading aluminium into a new phase of volatility.

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In addition to the Q2 forecast revision, Goldman Sachs has raised its 2026 annual average price forecast from USD 3,100 to USD 3,200 per tonne and also lifted its 2027 average forecast from USD 2,700 to USD 2,750 per tonne.

In his weekly LinkedIn newsletter, the London Metal Exchange trainer and risk management consultant, Jorge Eduardo Dyszel, mentioned, “The week of March 23–27 showed signs of stabilisation after the previous wave of aggressive liquidation.” With persisting volatility, “the market is no longer falling vertically, but it has yet to rebuild upward momentum,” he added.

However, Iran’s drone and missile attacks on the two leading Gulf smelters have once more sent the gradually recovering market tumbling into a new phase of panic over an aggravated supply crisis.  

Damages hit EGA’s Al Taweelah facility, which has an annual capacity of 1.5 million tonnes and Alba’s plant of 1.6 million tonnes, catalysing the LME aluminium prices soaring near four-year highs. 

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The March 31 session of LME aluminium closed with the cash offer price at USD 3,585 per tonne, breaking the previous record on March 12, which had witnessed the three-month benchmark surpassing USD 3,500 per tonne.

Goldman Sachs commented, "The impact on the global aluminium market remains highly uncertain," prompting the brokerage to remove 1.1 million tonnes of primary aluminium production from its 2026 balance.

Revising its outlook, the bank is now projecting a 570,000-tonne deficit in the global primary aluminium market in 2026, a sharp shift from its earlier estimate of a 550,000-tonne surplus.

The bank further noted that risks to its 2026 average price forecast remain tilted to the upside, particularly if the extent of damage exceeds expectations or in case additional supply disruptions due to strikes, or raw material or gas shortages.

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