Released February 25, 2014 | JOHANNESBURG
en
Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--United Company Rusal (UC Rusal) (Moscow, Russia), Russia's global aluminum major, forecasts global aluminum consumption will grow 6% in 2014 from 2013. China and other Asian economies are expected to experience strong growth, and the developed markets, including the U.S. and Europe, should continue to show healthy growth.
Continued capacity curtailments, despite production increases in the Middle East and Asia, are expected result in the addition of only about 70,000 tons of cumulative production in 2014 out of China. Excluding China, the global market deficit will grow from 570,000 tons in 2013 to about 1.4 million tons in 2014. The Chinese aluminum market will continue to be balanced, with a gradual production capacity increase.
In 2014, aluminum premiums will remain well-supported, due to strong financial and physical demand, according to Rusal.
In 2013, global aluminum consumption rose 6% from 2012 to 51.7 million tons. Excluding Chinese numbers, global consumption rose 4% to 26.32 million tons. In China, consumption grew 13% to 25.5 million tons, followed by India with 6% growth, Asia (without China) with 6% growth and North America at 4%. Consumption in Europe continued the strong rebound seen during the second half of 2013, with total growth reaching 2% from 2012.
Fixed asset investment in China increased 19.6%, according to the country's national bureau of statistics (NBS). New construction projects rose 13.5% in 2013, the NBS reported. The top gainer was the Chinese automotive industry, which grew 14.9% with record sales of 21.98 million vehicles, as reported by the China Association of Automobile Manufacturing.
The transportation sector remained strong, with Thailand maintaining a leading position in automotive production. Construction activity grew in the region, led by infrastructure development and the construction of new houses.
Following industrial production weakness experienced during the first nine months of 2013, Japan's economic indicators have recently signaled improved market conditions and may help reverse declines in demand. The Japanese purchasing managers index (PMI) in December 2013 was at 55.2, which was the fastest pace of expansion in more than seven years. This suggests that the government's pro-growth policies, which were introduced in early 2013, have started to spill over into Japan's manufacturing sector.
The key drivers of aluminum consumption growth in India continue to be construction, transport and electronics. In November, for the first time in four months, the HSBC/Markit PMI (purchasing managers' index) climbed to 51.3 as new orders rose, raising hope for the country's economy. Manufacturing activity picked up, led by a rise in domestic orders, which helped to lift output growth, according to India's Strategic Research Institute.
Construction and packaging growth in the Middle East is encouraging local consumption of primary metal, and investment in extrusions and flat-rolled products. The production of aluminum extrusions and flat-rolled products will dominate the Middle Eastern market, as growth is expected to be robust in the construction and packaging sectors.
The transportation sector continued to be the main driver of aluminum consumption growth in the North American region. Light vehicle production in North America reached 16.2 million units in 2013, up 4.3% from 2012. The key driver in the sector continues to be the increased demand for aluminum automotive body sheets. Aluminum rollers announced expansions to meet demand.
Aluminum demand in Europe maintained a strong rebound in the fourth quarter of 2013. The largest increase came from Turkey at 10%, followed by Germany at 3% and France at 2%. In the auto consumer market, new European car registrations jumped 13.3% in December.
According to recently published statistics from the International Aluminum Institute and market data, global aluminum production, excluding China, reached 25.66 million tons in 2013, which was down by 48,000 tons from 2012. The estimated 1.2 million tons of capacity cuts in Europe, North America and South America resulted in a deficit market, despite aluminum production growth in the Middle East and other Asian countries.
UC Rusal reports that as a result of continued consumption growth (excluding China), and almost unchanged production, there was a 570,000-ton supply deficit. Following recent Chinese government measures to tackle overcapacity and deteriorating market conditions, the Chinese aluminum industry has tempered net capacity increases with an increase of 2.2 million tons in shutdowns in central and southern parts of the country. Apparent consumption grew by 2.9 million tons by year-end 2013, leading to a 340,000-ton deficit.
Physical premiums continue to rise as a result of continued consumption growth, strong financial demand and the current tight aluminum supply. After the fall created by uncertainty over LME (London Metal Exchange) warehousing policy premium in the middle of the year, by the end of 2013, Rotterdam duty unpaid premium reached $210 per ton, the U.S. Midwest premium reached 12 cents per pound, and main Japanese port premium ranged from $210 to $230 per ton. The rise has continued into 2014, with the U.S. Midwest at 20 cents per lb, and Rotterdam at $275 to $315 per ton in January.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Continued capacity curtailments, despite production increases in the Middle East and Asia, are expected result in the addition of only about 70,000 tons of cumulative production in 2014 out of China. Excluding China, the global market deficit will grow from 570,000 tons in 2013 to about 1.4 million tons in 2014. The Chinese aluminum market will continue to be balanced, with a gradual production capacity increase.
In 2014, aluminum premiums will remain well-supported, due to strong financial and physical demand, according to Rusal.
In 2013, global aluminum consumption rose 6% from 2012 to 51.7 million tons. Excluding Chinese numbers, global consumption rose 4% to 26.32 million tons. In China, consumption grew 13% to 25.5 million tons, followed by India with 6% growth, Asia (without China) with 6% growth and North America at 4%. Consumption in Europe continued the strong rebound seen during the second half of 2013, with total growth reaching 2% from 2012.
Fixed asset investment in China increased 19.6%, according to the country's national bureau of statistics (NBS). New construction projects rose 13.5% in 2013, the NBS reported. The top gainer was the Chinese automotive industry, which grew 14.9% with record sales of 21.98 million vehicles, as reported by the China Association of Automobile Manufacturing.
The transportation sector remained strong, with Thailand maintaining a leading position in automotive production. Construction activity grew in the region, led by infrastructure development and the construction of new houses.
Following industrial production weakness experienced during the first nine months of 2013, Japan's economic indicators have recently signaled improved market conditions and may help reverse declines in demand. The Japanese purchasing managers index (PMI) in December 2013 was at 55.2, which was the fastest pace of expansion in more than seven years. This suggests that the government's pro-growth policies, which were introduced in early 2013, have started to spill over into Japan's manufacturing sector.
The key drivers of aluminum consumption growth in India continue to be construction, transport and electronics. In November, for the first time in four months, the HSBC/Markit PMI (purchasing managers' index) climbed to 51.3 as new orders rose, raising hope for the country's economy. Manufacturing activity picked up, led by a rise in domestic orders, which helped to lift output growth, according to India's Strategic Research Institute.
Construction and packaging growth in the Middle East is encouraging local consumption of primary metal, and investment in extrusions and flat-rolled products. The production of aluminum extrusions and flat-rolled products will dominate the Middle Eastern market, as growth is expected to be robust in the construction and packaging sectors.
The transportation sector continued to be the main driver of aluminum consumption growth in the North American region. Light vehicle production in North America reached 16.2 million units in 2013, up 4.3% from 2012. The key driver in the sector continues to be the increased demand for aluminum automotive body sheets. Aluminum rollers announced expansions to meet demand.
Aluminum demand in Europe maintained a strong rebound in the fourth quarter of 2013. The largest increase came from Turkey at 10%, followed by Germany at 3% and France at 2%. In the auto consumer market, new European car registrations jumped 13.3% in December.
According to recently published statistics from the International Aluminum Institute and market data, global aluminum production, excluding China, reached 25.66 million tons in 2013, which was down by 48,000 tons from 2012. The estimated 1.2 million tons of capacity cuts in Europe, North America and South America resulted in a deficit market, despite aluminum production growth in the Middle East and other Asian countries.
UC Rusal reports that as a result of continued consumption growth (excluding China), and almost unchanged production, there was a 570,000-ton supply deficit. Following recent Chinese government measures to tackle overcapacity and deteriorating market conditions, the Chinese aluminum industry has tempered net capacity increases with an increase of 2.2 million tons in shutdowns in central and southern parts of the country. Apparent consumption grew by 2.9 million tons by year-end 2013, leading to a 340,000-ton deficit.
Physical premiums continue to rise as a result of continued consumption growth, strong financial demand and the current tight aluminum supply. After the fall created by uncertainty over LME (London Metal Exchange) warehousing policy premium in the middle of the year, by the end of 2013, Rotterdam duty unpaid premium reached $210 per ton, the U.S. Midwest premium reached 12 cents per pound, and main Japanese port premium ranged from $210 to $230 per ton. The rise has continued into 2014, with the U.S. Midwest at 20 cents per lb, and Rotterdam at $275 to $315 per ton in January.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
