Reuters quoted senior official of Chinalco as saying that abundant stocks of aluminium and lukewarm demand in the global market may cap prices on the London Metal Exchange at about USD 1,950 per tonne on average next year from just above USD 2,000 expected this year.

Mr Yang Xiaowu director of futures department at Aluminum Corporation of China the top aluminium producer in China said that prices of the metal may continue to move within a narrow range in coming months and that would reduce trading interests from investors and speculators on the contracts both on the LME and the Shanghai Futures Exchange. The market may go back to the fundamentals next year. Aluminium prices for 2013 are not as optimistic as copper. High inventories typically are considered a bearish factor for prices when fundamentals are the focus. Aluminium stocks monitored by the LME stood at 5.058 million tonnes versus a record of 5.126 million tonnes seen in February this year.

Mr Yang said that consumption of aluminium in developed countries next year may be similar to this year. For China the world's top consumer and producer of aluminium he expects the country's consumption to rise 8% to 9% in 2013 from 7 to 8% estimated for this year. He did not provide the consumption amounts. Demand from investments in infrastructure transport projects power cables and wires and packaging would support higher consumption growth next year. Although the Chinese demand next year could be better than this year, domestic production would also rise adding to a surplus in the domestic market.

Source - Reuters

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