economy
Citi says it's the best buying set-up in this metal in 50 years
Aluminum prices are set to surge to average $4,000 per metric tonne in the second half of 2026, the bank said.
TL;DR
- U.S.-Iran conflict in the Middle East is causing supply shocks for aluminum.
- Aluminum inventories are projected to hit all-time lows.
- Aluminum prices are expected to soar to new heights, averaging $4,000 per metric tonne in H2 2026.
- This situation is described as the most bullish setup for aluminum in over 50 years.
- The current market shock is supply-driven, not demand-driven.
- Citi recommends two specific trading strategies: long the LME aluminum contract for December 2026 and long/short calls on the same contract.
- Despite near-term volatility, downside appears limited unless a severe recession occurs.