Aluminum Update: This Time Is Different

Research evidence excerpt

Aluminum Update: This Time Is Different

Equity Research

Multi Company Update — June 8, 2026

Mining

Our Call Timna Tanners

We forecast LME aluminum prices to squeeze to $4,000/t, creating attractive risk/reward Equity Analyst | Wells Fargo Securities, LLC

Timna.Tanners@wellsfargo.com | 212-214-5437

for AA and CENX on robust FCF. Tightness can extend through 2027E, with supply not

Matt Dushkin, CPAnormalizing until 2028E. We remain Overweight both CENX and AA.

Associate Equity Analyst | Wells Fargo Securities, LLC

matt.dushkin@wellsfargo.com | 713-320-7199

The great aluminum squeeze. We raise LME aluminum forecasts to $3,700/t for 2026E

(from $3,150) and $3,800/t for 2027E (from $2,950). The Middle East at ~9% of global Exhibit 1 - LME aluminum inventories vs

supply remains severely hobbled after energy and alumina disruptions plus direct missile- LME aluminum price

related damage to EGA and Alba smelters. We do expect modest supply response, with $4,000

~200Kt/yr from China, Slovalco looking to restart ~175Kt/yr. Restarts can take up to 4,200 $3,000

12-18 mos, and our new 2028E $3,250/t forecast reflects steeper input costs.

2,200 $2,000

AA and CENX well positioned. Flowing through higher forecasts and assuming Section 200 $1,000

232 50% tariffs remain in place should keep the U.S. Midwest premium elevated, yielding Jun-06 Jun-08 Jun-10 Jun-12 Jun-14 Jun-16 Jun-18 Jun-20 Jun-22 Jun-24 Jun-26significant upside to AA and CENX ests. AA appeared to more appropriately price in spot

LME of $3,739/t, trading at ~5.5x EV/EBITDA, within its historical range. Meanwhile, LME inventories (Kt, left)

CENX traded at ~4.5x vs. a historical 6–6.5x, suggesting a more favorable risk/reward. We LME aluminum price ($/t, right)

think both equities offer attractive upside.