The global aluminum consumption grows strongly and can basically digest the increased output: the global aluminum consumption in 2006 was higher than the expectation again with the increase of 8.0%, and the gap between supply and demand was 490 thousand tons. And China was still the most important driver in the global aluminum consumption growth with the growth rate of 22.6%. The increase of consumption in China is reflected by the fields like construction, electric power and transportation and so on.
In is predicted that there will be only small surplus of primary aluminum in the world in 2007 and 2008: about 390 and 110 thousand tons, which means the increase of global aluminum inventories will be quite limited in future two years. At present, the period that the global aluminum inventories can be supplied to consumption is just 5.9 weeks, which is far lower than the average level of 9.3 weeks in the past 30 years. And once the consumption growth surpasses the expectation, the inventories will be reduced furthermore and shape a great support to aluminum price.
In the future two years, the decrease rate of the aluminum oxide price will be quite limited and it is hard to fall below 3000 Yuan/Ton in 2007.
Along with the increase of the output of China aluminum oxide, the dependency on import aluminum ores has been pricked up drastically; it is predicted that the external dependency in 2008 will be increased to 47.3%. And at present, the imported aluminum ores in China are mainly from Indonesia.
Annual Output of Primary Aluminum in China (Unit: 10,000 tons)
Main Expansion Plans of Electrolytic Aluminum Production Capacity in China
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