John Tumazos, senior metals and mining analyst at Prudential Equity Group, voted aluminium as the the best commodity in 2007, largely because of the substitution inroads it is making.
"If $2-3/lb aluminium happens next year, it will be due to China's inability to produce more aluminium because of power [problems]," said Tumazos during a Wednesday conference call. "It's possible China may not be able to sustain 1.1 million mt of aluminium output growth because of power restrictions."
He cited press reports noting that perhaps 20% Chinese electrical power supply, because of pollution, is illegally operated.
China's aluminium production is expected to grow by 14% in 2007 to reach 10.5 million mt, compared with the projected 9.2 million mt this year, according to a statement posted on the National Development and Reform Commission's website this week.
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