The Goldman Sachs Group, a leading global investment bank and financial services company, shared aluminium price forecasts whereby it projected a growth led by soaring demand in Europe and China. But the setback it might create is supply shortages.
As per the prediction noted by analysts like Nicholas Snowdon and Aditi Rai, aluminium is likely to average US$3,125 per tonne this year on the London Metal Exchange. This will reflect an increase of US$530 per tonne or 20.42 per cent from the past year’s average price of US$2,595 per tonne and US$562 per tonne or 21.93 per cent higher than the bank’s previous forecast of US$2,563 per tonne.
Goldman also shared the metal price would most likely mount to US$3,750 per tonne in the next 12 months.
“With visible global inventories standing at just 1.4 million tons, down 900,000 tons from a year ago and now the lowest since 2002, the return of an aggregate deficit will quickly trigger scarcity concerns,” the analysts said. “Set against a far more benign macro environment, with fading US dollar headwinds and a slowing Fed hiking cycle, we expect upside price momentum to build progressively into spring.”
Aluminium price reached record highs in early 2022 as a repercussion of Ukraine-Russia conflict from February. But later on, it slumped when many smelters had to curb production due to energy crisis in Europe and a slowing global economy.
Goldman Sachs is bullish on commodities future as a whole, arguing a lack of investment in recent years has led to low supply buffers. It also projects the asset class generating investors’ returns of more than 40 per cent this year as China reopens and global economy climbs in the second half of 2023.
Responses
