Alcan predicts aluminum surplus in 2007
Supply increase could bring aluminum prices down
By Dave Hannon -- Purchasing, 2/2/2007 12:44:00 PM
Aluminum producer Alcan is predicting a global surplus of aluminum this year which could bring aluminum prices down over the course of 2007.
In its recent earnings statement, Alcan said aluminum prices gained 30% in the fourth quarter of 2006, more than making up for a drop in shipments.
“For 2007, world primary aluminum consumption is forecast to increase by approximately 6.7% (6.8% in 2006), while production from new capacity and restarts is expected to increase world supply by about 7.8% (6.3% in 2006)” resulting in a small surplus of approximately 200,000 tons, about 0.5% of estimated total world supply. In 2006, there was an estimated deficit of 160,000 tons which pushed prices up.
Alcan also said it is seeing strong demand for aluminum for the cable and electric-conductor markets as industrial consumers use more of the metal as a substitute for copper. Copper prices have more than tripled in the past four years.
Alcan also said it plans to boost its supply of alumina after prices gained last year.
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