Press Metal Outlook Shifts As Aluminium Supply Rises

Aluminium industry is heading towards a more uncertain supply cycle, with new smelting capacity in Indonesia and India expected to reshape global availability from 2027. For Press Metal Aluminium Holdings, the near-term market remains relatively supportive, but softer benchmark prices could test earnings while the additional supply raises longer-term pressure on margins and industrial costs.

The company recorded core earnings of RM719 million in the second quarter of 2026, taking first-half core earnings to RM1.33 billion. Its reported net profit for the quarter was RM801 million, while first-half net profit reached RM1.43 billion. The results underline the strength of the business during a period of elevated aluminium prices and physical supply constraints. However, the aluminium supply outlook is becoming less favourable beyond the current year. Hong Leong Investment Bank Research expects the market to remain relatively tight through 2026, before new production from Indonesia and India, together with the return of some Middle Eastern capacity, increases the possibility of a surplus in 2027.

The shift matters beyond commodity markets. Aluminium is widely used in buildings, transport systems, power networks, renewable-energy equipment and other urban infrastructure. Changes in metal prices can therefore influence procurement costs for construction and infrastructure projects, although the impact on individual projects will depend on contracts, inventories and the timing of purchases. For now, physical availability is providing some protection against weaker London Metal Exchange prices. The Main Japanese Port premium, which reflects the additional cost of securing physical aluminium, remained elevated at more than US$300 a tonne during the quarter. Research indicates that continued supply constraints have kept these regional premiums high even as the wider benchmark has retreated towards US$3,200 a tonne.

That support may not last indefinitely. HLIB has reduced its earnings forecasts for the company as lower aluminium-price assumptions point to weaker performance in the second half of 2026. The research house also expects the market’s risk-reward balance to become more difficult if additional capacity arrives as planned. The aluminium supply outlook will consequently depend on how quickly new capacity becomes operational, how strongly global demand grows and whether Middle Eastern production fully recovers. For cities and infrastructure developers, the broader issue is predictability: stable access to essential industrial materials can help limit cost volatility and support more reliable long-term planning.

Also Read: Vedanta Aluminium Rise Highlights Wider Market Concerns

Press Metal Outlook Shifts As Aluminium Supply Rises