BHP Billiton Ltd – the world's largest mining company – said it expects the global alumina market to move into oversupply in 2007 as new production capacity comes online.
As a result of the new capacity, China – the world's top user and producer of aluminium – is reducing imports of alumina, BHPB added in a presentation on its corporate website.
Earlier this month, China's Antaike Information Development Agency said it expects China to raise alumina production by 45% next year to meet the growing domestic demand
Alumina prices have fallen around 60% this year and are now pegged at around US$225/t.
Julius Matthys, marketing director of BHPB's aluminium business unit said: "Demand growth next year is expected to trail capacity growth as new units realise their nameplate capacities."
The alumina market will be in excess and won't return to balance untill two or three years later, said Bloomberg, citing Alcan Inc – the world's second biggest aluminium producer. Four to five tonnes of bauxite produces around two tonnes of alumina and one tonne of aluminium.
In other news, BHPB said it plans to shut its Kwinana nickel refinery for 21 days in March as part of a "major scheduled outage".
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