May 09 2014 LONDON (Scrap Register): BNP sees potential for aluminum, long thought of as an oversupplied market, to tip into a supply deficit in the second half of the year.

"Aluminum is still stuck with excess production capacity as well as massive surplus inventories," said the analysts with BNP Paribas. "But strong demand and producer cuts will tip the market into deficit from H2 14, with the shortfall growing in 2015."

BNP Paribas sees world aluminum demand growing 6.5% in 2014. The output cuts expected this year are not likely to make material inroads into excess existing inventories, the bank sees a 2014 deficit of some 750,000 tons.

As a result, prices on the London Metal Exchange could approach $2,000 a metric ton by the middle of 2015, BNP Paribas concluded.