Global demand for primary aluminium ingots in 2007 is expected to rise by 5.8% year on year in 2007, said Japanese trading house Marubeni on Monday. The 2007 ingot demand, projected to be 36.257 million mt, will balance with the supply that is also expected to increase. Marubeni sees the 2007 global ingot supply at 36.299 million mt, up 7.0% year on year and slightly higher than the forecast demand, by 42,000 mt. "We are expecting to see a slight surplus in the supply amid demand growth," said Hiroshi Adachi, general manager of Marubeni's light metals department.
Adachi said the 2007 demand rise would be supported by the steady demand growth in the US and western Europe, projected at 1.2% and 1.7% respectively, and the rapid growth in the emerging economies such as Russia and China, seen to grow by 8.8% and 14.7%. On the other hand, the lower power and alumina costs would encourage smelters worldwide to output more volumes. "The US smelter Ormet is restarting two idled lines in January and four more in June. Production lines in Iceland will be on-stream, there is a plant re-starting in Germany, and overall, I see a 7% supply growth in 2007," Adachi said.
On the back of a marginal surplus in the global aluminium supply, Marubeni sees the London Metal Exchange aluminium prices trading in a range of $2,000-2,700/mt in 2007, slightly lower than $2,258-3,300/mt so far this year.
Adachi said the LME aluminium prices would not fall in one direction, but would be supported at a lower level next year on the back of steady demand. Meanwhile, Adachi said he sees Japan's ingot demand in 2007 to climb up 1.8% year on year to 2,398,000 mt. Japan' domestic production of primary aluminium ingots is merely 50,000 mt/year and imports 98% of the metal the country consumes.
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