In a recent report, Goldman Sachs analyst Nicholas Snowdon has raised concerns about a deepening global aluminum shortage in 2024, attributing it to a combination of factors including smelter capacity constraints and electrolytic aluminum production cuts in Yunnan. According to Snowdon’s analysis, the primary onshore aluminum production is anticipated to grow by a mere 2% in the upcoming year, while the global demand for aluminum is expected to surge by 4.5%. This discrepancy is poised to result in a substantial global aluminum shortage, estimated at 1.23 million tons—nearly double the shortage recorded in 2023.

The report underscores the severity of the situation, pointing out that smelter capacities are nearing their upper limits, and regional production cuts are exacerbating the challenge. This tightening supply-demand balance is anticipated to drive aluminum prices to $2,600 per ton within the next 12 months, according to Goldman Sachs predictions.

The global aluminum market is facing increased pressure due to the rising demand for renewable energy and electric vehicles. Aluminum, a crucial component for various industries, including the production of batteries for electric vehicles, is witnessing a surge in demand. However, the current constraints in production capacities, coupled 

with regional cutbacks, are making it challenging to meet this growing demand, further propelling the upward trajectory of aluminum prices.

Goldman Sachs’s comprehensive report also included forecasts for other base metals. The analysts anticipate copper prices to reach $10,000 per ton, reflecting a bullish trend, while nickel prices are expected to dip to $15,000 per ton within the next 12 months. These projections are grounded in a meticulous analysis of global economic conditions, demand patterns, and an assessment of the delicate balance between supply and demand in the metals market.

As the world grapples with these dynamics, industries relying on aluminum, copper, and nickel are likely to face increased production costs and potential challenges in securing a stable supply chain. Investors, manufacturers, and policymakers will closely monitor these developments as they navigate the evolving landscape of the global metals market.