Author: Paul Ploumis
15 Oct 2014 Last updated at 03:24:24 GMT
CANTERBURY (Scrap Monster): The French bank Natixis has predicted deficit for global aluminum market in 2014. The bank forecasts a deficit of 275,000 mt in 2014- the first annual deficit in eight years, primarily on account of large scale production cuts and rising aluminum demand across the globe.
According to Natixis, the global aluminum supply will total 49.2 million mt, whereas global consumption is likely to total 49.475 million mt, thus resulting in a deficit of 275,000 mt deficit.
Large number of Chinese smelters cut production during 2013 and H1 2014, due to rising power costs and falling profit margins. Cutbacks totaled approximately 1 million to 1.3 million mt in 2013 and 1.4 million to 1.8 million mt during first half of the current year. However, the bank predicts that many of these facilities may come back online during the last quarter of 2014.
In addition, Rusal had cut its aluminum output by 324,000 mt in 2013. The company also aims to further reduce its aluminum production by another 323,000 mt this year. Similar production cuts were implemented by Alcoa through closure of its smelters in Italy, Australia and Brazil.
Natixis forecasts global aluminum supply to reach 51 million mt in 2015. The global consumption will total 52.2 million mt, thus resulting in a deficit of 1.2 million mt. Furthermore, the bank predicts 5.5% growth for global aluminum demand in 2014 and 2015, followed by 6% growth in 2016.