Scrap Monster
Vulcan
Vulcan
Aluminum November 26, 2014 06:51:57 AM

Aluminum hikes picking on increasing Chinese demand

Paul Ploumis
ScrapMonster Author
The chances of an aluminum bullish market are very high as the Chinese supply seems to slow down but the growth of demand doesn’t.
Aluminum hikes picking on increasing Chinese demand

WASHINGTON (Scrap Monster): It is very clear now that the US aluminum industry will well benefit from the changing landscape of the aluminum industry, with the rise in demand and decline in the growth of supply. In the last ten tears of metal environment, aluminum has always been the snail. Even as the demand for the metal has raised very well in the last 10 years the supply from China, has always lagged the price of the commodity. In the year 2013, China was at its peak of aluminum production, but recently the approvals of new aluminum smelter have been rejected, and the producers are equally worried about the decline in the availability of raw material; bauxite, due to the Indonesian ban on bauxite exports.

The recent declaration about restarting the closured aluminum plants; which is estimated to contribute 5 percent of the world supply of aluminum production, seems to be senseless.  All these restarts are noted to be price sensitive, those miners who recovered from the strike caused by the weak aluminum price. So there shouldn’t be any worries regarding the oversupply that might be caused by the restarted mines.

The demand growth in the domestic market would definitely considerably affect the export of aluminum to foreign lands. According to the forecast the domestic demand for aluminum from China will increase at least a 10 percent under the period 2014-2015, which would increase the global demand caused by the acute export of the commodity, and create a tight supply demand position hiking up the price.