Aluminium
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[edit] Aluminium
Aluminium is the third most abundant element in the Earth's crust. In nature however it only exists in very stable combinations with other materials (particularly as silicates and oxides) and it was not until 1808 that its existence was first established. It is widely used in the construction, transport, and packaging industries. Aluminium's attributes are ideal for the construction business. The metal is strong, light, corrosion resistent and versatile. It is used in construction, for windows, doors, cladding, weather-proofing, light constructions such as conservatories and canopies. [1]
[edit] General uses
Global demand for primary aluminium is expected to rise to 9.5 percent to 41.26 million tonnes in 2008, while supply is expected to increase 10 percent to 41.8 million tonnes. In 2009, global demand is expected to rise 5.6 percent to 43.57 million tonnes from 2008, while supply is expected to increase 4.7 percent to 43.78 million tonnes.[2]
[edit] Pricing structure
Each mineral on the list is subject to supply and demand based on the mineral. Take a look going back 15 years at the price of Aluminum, which is the metal with the highest “value” in the Earth’s crust, and you see that the current price is about double the 15 year low. Aluminum has not done the same degree of outrageous price increases and spikes as other metals. I would suggest the reason is that there is so much aluminum, the market can respond far faster to under and over supply situations. At 8.2% of the earth’s crust, aluminum is a macro element. The price of aluminum temporarily spiked to about 3 times the 15-year-low. It is currently about double the price of 15 years ago. The current price is still on the strong side in comparison to historical prices, but if you think about it from just an inflation perspective, many things have doubled in the past 15 years. [4]
[edit] Current consumption trends
Aluminium is taking market share from other metals, such as copper, as the prices of those metals remain very high. China's apparent consumption of primary aluminium rose by over 40 percent in the first 11 months of 2007, beating the growth rate of 31 percent in refined copper, according to Reuters calculations. [5]
Analysts are predicting that global aluminium consumption will rise by another 8.7% in 2008. While demand will contract in the US and Japan, and halve in Europe, it will grow by another 20% in China. Other developing markets will also kick in, with demand in the Former Soviet Union rising 7.5%, Eastern Europe 4.5%, and Asia (ex-China/Japan) 3.9%.[6]
[edit] Price forecasts
The price of aluminium has more upside than downside in the medium term:
- UBS analysts have set a forecast average aluminium price of US$1.24/lb for 2008.
- Citigroup analysts foresee circumstances which could push the 2008 price all the way to US$1.70/lb.
- JP Morgan, this week increased its 2009 aluminium price, but to only US$1.084/lb. [7]
- Macquarie Equities predicts the aluminium price will rise from an average of $US1.15 a pound this year to $US1.30 a pound next year.[8]
[edit] Major producers
In 2006, global aluminium production was around 33.9 million tonnes. The major producers are China followed by Russia, Canada and the United States, and the major consuming countries are China, the US, Japan, Germany, Russia, Italy, Canada, France, Spain, UK, Korea, and India. [9]
[edit] China’s recent rise
In 2007 alone, China increased its aluminium output by an extraordinary 35.4%. But consumption grew by an even higher 37.7%. Demand growth across the globe increased by 10% in 2007, but still we ended up with a surplus of 360kt. Production is keeping up with consumption globally, and the balance of sensitivities is very much controlled by China.[10]
[edit] External References
- ↑ http://www.basemetals.com/html/alinfo.htm
- ↑ http://www.reuters.com/article/companyNewsAndPR/idUST34273620071106
- ↑ http://www.rusal.com/post_presentation/VladimirKremer_Metal%20Bulletin.pdf
- ↑ http://makingsenseofmyworld.blogspot.com/2007/09/abundance-of-minerals.html
- ↑ http://economictimes.indiatimes.com/News/International__Business/Analysts_see_copper_underperforming_aluminium_in_2008/articleshow/2716638.cms
- ↑ http://www.egoli.com.au/egoli/egoliStoryPage.asp?PageID=%7B9D1F9E84-C51E-4C40-B77B-E0FB57B48FBA%7D&Section=Feature
- ↑ http://www.egoli.com.au/egoli/egoliStoryPage.asp?PageID=%7B9D1F9E84-C51E-4C40-B77B-E0FB57B48FBA%7D&Section=Feature
- ↑ http://business.smh.com.au/commodities-markets-back-rio-tinto/20080118-1msn.html
- ↑ http://www.commoditywatch.in/index.php?action=show_full_story&content_id=134
- ↑ http://www.egoli.com.au/egoli/egoliStoryPage.asp?PageID=%7B9D1F9E84-C51E-4C40-B77B-E0FB57B48FBA%7D&Section=Feature
