Is the market too bearish on aluminium?

Simon Mugo

Fri, October 30, 2026 at 9:10 PM EDT 2 min read

Investing.com --Investor sentiment toward aluminium has turned excessively bearish despite resilient demand and historically low inventories, according to analysts who expect prices to rise to $3,625 per tonne in 2027.

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The analysts said discussions with market participants pointed to unusually negative sentiment, but argued that aluminium's underlying supply-demand fundamentals supported a more constructive outlook.

Their assessment followed Norsk Hydro's (OSL) third-quarter results, which showed stronger year-on-year earnings but fell short of market expectations.

The Norwegian aluminium producer reported EBITDA of NOK 9.1 billion, up 52% from a year earlier and 2% sequentially, but 6% below consensus estimates.

Higher aluminium prices supported earnings, although rising costs and foreign exchange movements weighed on profitability.

Performance varied across divisions, with Bauxite and Alumina exceeding reduced expectations and Extrusions outperforming forecasts. Primary Metal, Markets and Energy delivered weaker results.

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The analysts lowered their 2026 EBITDA forecast by 4% to NOK 34.9 billion and reduced their price target to NOK 92 from NOK 98, maintaining a Buy rating.

Hydro also lowered its capital expenditure guidance to NOK 12.5 billion from NOK 13.5 billion.

Operational disruptions remained a concern after a temporary natural gas supply interruption affected the Alunorte alumina refinery.

Production has returned to normal following alternative LNG arrangements, although elevated energy costs are expected to persist into the fourth quarter.

Meanwhile, Hydro has begun restarting its Slovalco smelter in Slovakia, targeting annual production capacity of 75,000 tonnes by February 2027.

The company's downstream Extrusions business also showed signs of recovery following an extended downturn.

Improving recycling margins, better cost performance and stabilising market conditions supported the division's third-quarter performance.

The analysts expect higher volumes and steadier margins ahead, reinforcing their view that aluminium market pessimism may be overstated.