The global aluminum market looks set this year to see its first annual deficit in 8 years because of global production cutbacks and increasing demand, French bank Natixis said Tuesday.
In response to rising electricity prices and poor profitability, Chinese smelters cut output during the first half of 2014, Platts reported.
“On top of cutbacks of somewhere around 1-1.3 million million tons a year in 2013, as much as 1.4-1.8 million mt/year of capacity was curtailed in the first half of 2014,” the bank said in the report.
Natixis, however, added that profitability for Chinese smelters improved over the summer and it expects to see plants come back online with output increasing toward the end of the year.
With a 0.6% increase over the past day, the aluminum cash price was the biggest mover on the LME, closing at $1,903 per metric ton on Tuesday, October 14. On the LME, the 3-month price of aluminum inched up 0.6% to $1,933 per metric ton. After a couple of days of decreasing prices, the Indian aluminum cash price held steady at INR 118.80 ($1.94).
Chinese aluminum prices closed flat for the day. The price of Chinese aluminum scrap was unchanged at CNY 12,250 ($1,995) per metric ton. The price of Chinese aluminum billet continues hovering around CNY 13,590 ($2,213) per metric ton for the fifth day in a row. The price of Chinese aluminum bar saw little movement at CNY 14,200 ($2,312) per metric ton. For the fifth consecutive day, the Chinese aluminum cash price held flat at CNY 13,960 ($2,273) per metric ton.