Goldman Sachs Predicts 900K-Ton Q2 Aluminum Deficit, LME Prices Soar 3.8%
Goldman Sachs analysts forecast a 900,000-ton aluminum deficit in the second quarter, projecting global LME inventory cover to fall to 45 days. They note LME prices climbed 3.8% to $3,422.50 per ton while European billet costs surged 63%, potentially driving greater trading revenues and risk premiums for the bank’s commodities division.
1. Analyst Forecast of Q2 Deficit
Goldman Sachs analysts expect a global aluminum shortfall of 900,000 tons in Q2, leading to a projected drawdown in LME warehouse stocks to just 45 days of consumption coverage.
2. Recent Market Price Trends
Spot LME aluminum prices have risen 3.8% to $3,422.50 per ton, with futures surging as much as 6% after Gulf supply disruptions, and European billet costs jumping 63% since the conflict began, creating backwardation and a cash premium of $61.23 over three-month contracts.
3. Implications for Commodities Trading
Elevated volatility and widening physical premiums are likely to bolster Goldman Sachs’s commodities trading revenues, while increased risk management demand could drive higher fees in the bank’s metals division.