Alumina Enter into Winter Electrolytic Aluminum Smile to Spring

From August 2006 international alumina spot prices fell sharply, China's aluminum enterprises are facing the spring.

In 2006, the international aluminum market supply is tense, and is expected nearly 400,000 tons shortfall. As China electrolytic aluminum demand still maintain strong, growth rate of global demand of electrolytic aluminum in 2007 could reach 5.8%, and slightly lower than 6.3% in 2006, global supply and demand of electrolytic aluminum in 2007 is expected to show overall balance in the state.

With the rapid growth of China's alumina production capacity, the global alumina production capacity is expected to be a huge surplus in the next two years, which will cause alumina price fall sharply. Moreover, as China's economy continues to grow at a high speed, it is expected that China's electrolytic aluminum demand in 2007 and 2008 will maintain the growth rate of about 14% and electrolytic aluminum prices will still maintain at a higher level. Therefore, the aluminum production industry is optimistic about the development trend for the next two years. But it will mean winter coming to alumina production enterprises.

Due to the rapid growth of alumina production capacity, China's bauxite resources in the next two years will be a serious shortage, alumina producers will have to import large quantities of bauxite, which will lead to a sustained rise in prices for bauxite pressure in the next two years. With the increase of output of electrolytic aluminum, the downstream of aluminum industry chain aluminum processing capacity will also increase rapidly. At present, the industry is optimistic about those high value-added products, Aluminum processing products with technical barriers, such as electron aluminum foil, cans and other materials.

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