DJ Aluminum Cash Price to Average 2% Higher in 2008 - Analyst

SHANGHAI (Dow Jones Commodities News via Comtex) -- The price of aluminum in the cash spot market will average about 2% higher in 2008 at $2,800 per metric ton, supported by healthy demand growth in China and other emerging markets, a senior Deutsche Bank official said Thursday.

Unlike other metals, aluminum prices in the long term won't fall significantly from today's prices, Caspar Jonk, director of structured trade and finance at Deutsche Bank's Asia-Pacific operations, said in a presentation to a metals conference in Shanghai.

Jonk said Deutsche Bank forecasts that prices will fall only about 16% by 2010 to $2,315 per metric ton from current levels, whereas it expects copper prices to drop about 36% in the same period.

Higher energy costs to produce aluminum, along with high demand compared to other metals due to aluminum's energy efficiency, is widely expected to sustain prices at levels well above their historical averages.

Jonk said the bank expects the primary aluminum market will experience a supply surplus of 450,000 metric tons in 2008, up from 350,000 tons this year. The surplus will widen to 510,000 in 2009 before dropping by more than half to 240,000 tons.

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