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Global aluminum market likely to swing to deficit in 2014

iconAug 15, 2014 08:41
Source:SMM
Analysts and investment banks predict that global aluminum market is likely to end in deficit this year for the first time after 8 years.

Author: Paul Ploumis14 Aug 2014 Last updated at 06:35:19 GMT

SPOKANE (Scrap Monster): Analysts and investment banks predict that global aluminum market is likely to end in deficit this year for the first time after 8 years. It was in 2006 that the aluminum market had posted deficit before. Steep cuts in production capacities and escalating demand from automotive sector are being cited as the key factors for the deficit market.

According to Sumitomo Corp, global consumption of aluminum is expected to exceed supply by 61,000 metric tons in 2014. The metal had ended the year 2013 with a surplus of 580,000 tons. The trading house also predicts that the deficit will further increase to 493,000 tons in 2015.

Goldman Sachs forecasts a much higher deficit of 579,000 tons this year. In a report released during end-July, the firm states that almost 50 smelters are likely to be closed. Alcoa Inc had closed its Point Henry, Australia facility last month. The company has also announced to curtail capacities at two Brazilian smelters. Norsk Hydro ASA has also decided to permanently close its Kurri Kurri smelter in Australia. All these are likely to add the supply shortage.

On the contrary, Citigroup Inc forecasts surplus to remain until 2016. According to Morgan Stanley, the global aluminum market surplus will continue until 2017.

 

BofA Merril Lynch
global aluminum
surplus
deficit
aluminum price
automobile industry
Point Henry

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