UBS-China Basic Materials Aluminium expert：supply constraints to persist in 26 27...-20251128

Supply constraints persist till 2028

Aladdiny aluminium expert Mr. Liu Yang remains positive on the aluminium market in2026-27. According to their latest site visits and channel checks, Mr. Liu projectsincremental aluminium production outside China will be only 726/1,460kt in 2026/27(1%/2% of global supply, this is considered moderate) although new capacity additionsappear substantial at 2.3/1.9mtpa in 2026/27. Mr. Liu emphasizes that new capacitydoes not immediately translate into actual production and thus he believes there will stillbe upside risks on aluminium prices due to supply constraints persisting in 2026/27.Potential supply threat is not likely to happen until 2028, in Mr. Liu 's view, and thisforecast is primarily based on the critical constraint posed by power plant constructioncycles in Indonesia, the key region for future aluminium capacity expansion. Thedevelopment timeline for these essential power facilities is extensive. The processinvolves a lengthy 14-24 months for permit approvals, followed by 3-4m for projecttender processes, and finally, a physical construction phase lasting 15-24m.