SINGAPORE United Co.
Rusal, the worlds largest aluminum producer, expects
aluminum demand to rise 6 percent in 2013 on the back of
Chinese infrastructure projects, the company said on Feb.
"Rusal expects that the
uncertainties seen in 2012, namely the current eurozone
financial crisis and slowdown in Chinese growth, will lessen
during 2013, thanks to the strong financial stimulus programs
by central banks in key regions and growing data from China,"
Global primary aluminum demand
is expected to total 50 million tonnes in 2013, an increase of
6 percent from 2012 levels, the Moscow-based company said.
China will remain the fastest
growing primary aluminum market in 2013, registering
9.5-percent growth, followed by India at 6 percent,
Asiaexcluding Chinaat 5.8 percent, North America at
5 percent, and Russia and the CIS at 4 percent, Rusal
Europe, meanwhile, is likely to
see a 2-percent year-on-year drop in primary aluminum
consumption in 2013.
"According to (a) WardsAuto
forecast, Chinese car production is expected to exceed European
production in 2013," Rusal said, adding that China is forecast
to manufacture 19.6 million cars and light vehicles in 2013, an
increase of 10 percent from last year.
"The emerging economies like
China and India should be the ultimate beneficiaries of
aluminum demand from the car sector given that the aluminum
penetration in those countries remains well below the level in
North America and Europe," Rusal said.
"While aluminum demand in Europe
remained subdued, this was offset by strong consumption growth
in China and the U.S. in the fourth quarter of 2012, which has
continued into the first quarter of 2013 and ensures positive
sentiment for the year ahead," it added.
In 2012, Chinas aluminum
consumption grew by 9.3 percent to 21.8 million tonnes, while
U.S. consumption rose by 5.4 percent to 5.9 million tonnes.
Japanese aluminum consumption grew by 3.1 percent to 2 million
tonnes in 2012, while consumption in South Korea grew by 3
percent to 1.3 million tonnes.
Global aluminum consumption in
2012 rose by 6 percent to 47.4 million tonnes, the company
investments were boosted by 20.6 percent in 2012," Rusal said,
adding that "the continued urbanization process will require
significant investment in infrastructure, including housing,
transportation and social services in 2013."
Chinas stimulus program
for home appliance purchases in rural areas boosted sales of
products containing aluminum, such as televisions, air
conditioners, washing machines and refrigerators, it said.
The producer also said it
expects some global aluminum capacity to go offline.
"About 1 (million to) 1.5
million tonnes of the global aluminum production (will) be
idled in 2013 under the current circumstances as significant
amount of the global production will be at the break-even
point," Rusal said.
Aluminum premiums will therefore
continue to grow in 2013, the company said.
"The increase in demand and the
tight metal availability continued to push regional premiums to
historical highs in all major regional markets in 2012 and this
trend will possibly continue in 2013," Rusal said.
At the end of December, the
Japanese premium stood $254 per tonne, the United States
Midwest premium was $248 per tonne, and the Rotterdam,
Netherlands, in-warehouse premium was reported to be at $285
per tonne, it added.
"The current warehouse
incentives in Europe and the U.S. will continue to attract
surplus metal, which will be supported by strong contangos
resulting from ongoing low costs of finance and renewed
interest from the hedge funds," the company said.
Financial deals continue to be a
dominant factor for LME aluminum pricing.
"As more than 65 percent of LME
stocks are locked in financial deals, ongoing low costs of
finance and renewed interest from the hedge funds increase
financial trading of aluminum contracts, which is significantly
exceeding a physical demand," the company said.
Rusals total aluminum
output in 2012 was 4.173 million tonnes, up 1 percent from 2011
due to increased production across the lower-cost aluminum
smelters located in Russias Siberia region, as well as at
Kubal in Sweden and at Alscon in Nigeria.
Output at its Sayanogorsk
aluminum smelter rose by 8 percent in 2012 due to reduced
output in the second half of 2011 following a railway bridge
Ruals total aluminum
output in the fourth quarter of 2012 fell by 2 percent year on
year to 1.038 million tonnes.
Alumina production fell 8
percent in 2012 to 7.477 million tonnes, primarily due to the
shutdown of the Friguia alumina refinery in Guinea in April
2012 after workers went on strike. In January this year, a
company spokesperson said Rusal was considering restarting the
refinery in 2013.
Alumina output in the fourth
quarter decreased by 13 percent year on year to 1.806 million
Bauxite production also
decreased by 8 percent to 12.365 million tonnes in 2012. The
decrease was mainly due to the reduced mining operations at the
Friguia bauxite mine, the company said.
Bauxite output in the fourth
quarter fell 15 percent year on year to 2.788 million
In December 2012, Rusal said it
had committed itself to the production of 3 million tonnes per
year of bauxite at the Dian-Dian deposit in Guinea within three
years, as part of a long-term development agreement struck with
the Guinean ministry of mines.
The development of the worlds largest bauxite deposit
at Dian-Dian will be divided into four phases, expected to be
realized by the end of 2019. It will include the development of
a bauxite mine and construction of an alumina refinery.
A version of this article
was first published by AMM sister publication Metal