LONDON, Oct 27, 2011 (Dow Jones) -- The primary aluminum market in China is expected to be largely balanced for 2011, although consumption of the metal fell in the third quarter, Norwegian producer Norsk Hydro ASA (NHY.OS) said Thursday.
China is the world's largest producer and consumer of aluminum, the metal used in aerospace and automotives, and its demand-supply fundamentals can have a strong influence on price direction.
"Consumption of primary aluminum in China decreased slightly in the third quarter following a historically high level in the previous quarter," the company said. "Annualized consumption in the third quarter amounted to 19.7 million metric tons," it added.
Norsk Hydro said that demand for primary aluminum in the world outside China declined during the third quarter from the previous quarter, amounting to an annualized consumption of 25.7 million tons.
Supply of primary aluminum has meanwhile continued to increase as new projects come on stream, it noted, with annualized production of 26.5 million tons in the third quarter.
"Although market sentiment has weakened during the quarter due to growing economic uncertainty, we continue to foresee an overall market growth of about 7% in 2011," the company added.