With higher than expected December ISM and Non Farm Payroll data and growth in housing start ups from November 2011 there is firm evidence that business and consumer confidence is improving.
The automotive industry is expected to maintain recent growth trends into 2012 with passenger car sales projected at over 13.5 million in 2012 vs. 12.8 million in 2011 and less than 10 million just over a year ago. Long overdue replacement of commercial vehicles and engines is also expected.
This will provide solid support to the casting, sheet, plate and extrusion segments with most of the auto industry related suppliers expected to operate near full capacity. The aerospace industry is expected to expand by 10% in 2012 with further consumption support coming from the construction sector.
UC RUSAL forecasts that improvement in the demand for aluminum from the physical market will support the Midwest premium at the 2011 level of USD 8.0 and 8.5 cents per lb with additional upside related to the extent of supply disruption and curtailments in the region.
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