Company
Supply of Aluminium May be Reduced
Posted: 2014-04-22 04:33:40 Hits: 1254
In the last three weeks , aluminium prices have shot up for over 7% . This follows the London High Court ruling that has stopped the London Metal Exchange’s (LME) plans from accelerating delivery of the metal from warehouses. The new warehouse rule has been effective on April 1.
It is expected that the move will cut logjams and see premium on the metal fade. Aluminium prices are, however, likely to remain higher this year as there is an imbalance in demand-supply.
The global aluminium market (except for China) has entered into a deficit after eight long years of oversupply. According to Russian company Rusal PLC, the world’s largest aluminium producer, there was a deficit of 570,000 tonnes in 2013.
A prolonged oversupply situation that had forced the global player to cut down production is regarded as the major factor for the market moving from surplus to deficit. The company expects the deficit to widen to 1.4 million tonnes in 2014.
Demand is expected to be 6 % higher, driven by an increase in consumption in aerospace and auto sectors. Increase in demand, coupled with widening deficit, could limit any fall in aluminium prices and push it further higher this year.
India is one of the top aluminium producers of in the world.
The entire domestic demand is met from production within the country. Due to reduced demand from sectors such as automobile, construction and power, the year 2013 was not a great one for the Indian aluminium sector .
According to the World Bureau of Metal Statistics, aluminium production and consumption in India dropped 8.3% and 8.8%, respectively, in 2013. Indian aluminium prices move with the global price. For that, any fluctuation in the global price, coupled with the movement in the Indian rupee, will have an impact on the local price.
It is expected that the move will cut logjams and see premium on the metal fade. Aluminium prices are, however, likely to remain higher this year as there is an imbalance in demand-supply.
The global aluminium market (except for China) has entered into a deficit after eight long years of oversupply. According to Russian company Rusal PLC, the world’s largest aluminium producer, there was a deficit of 570,000 tonnes in 2013.
A prolonged oversupply situation that had forced the global player to cut down production is regarded as the major factor for the market moving from surplus to deficit. The company expects the deficit to widen to 1.4 million tonnes in 2014.
Demand is expected to be 6 % higher, driven by an increase in consumption in aerospace and auto sectors. Increase in demand, coupled with widening deficit, could limit any fall in aluminium prices and push it further higher this year.
India is one of the top aluminium producers of in the world.
The entire domestic demand is met from production within the country. Due to reduced demand from sectors such as automobile, construction and power, the year 2013 was not a great one for the Indian aluminium sector .
According to the World Bureau of Metal Statistics, aluminium production and consumption in India dropped 8.3% and 8.8%, respectively, in 2013. Indian aluminium prices move with the global price. For that, any fluctuation in the global price, coupled with the movement in the Indian rupee, will have an impact on the local price.