Reuters reported that the global aluminum market will swing into a deficit of 357,000 tonnes in 2013 with the Chinese market dipping into a wider deficit of 500,000 tonnes during the year as supply growth from China, Middle East and other emerging economies will slow.

Marubeni, Japan's fifth biggest trading company, expects the 3 month LME aluminum price to start rising in the middle of 2012 in anticipation of the easing of a supply glut with the median price rising to USD 2,800 per tonne in 2013 up from an estimated USD 2,400 in 2011. The benchmark aluminum price now hovers at around USD 2,030 on the London Metal Exchange. It expects the European debt woes to ease off early next year.

Mr Takeshi Kondo GM at Marubeni said that "A rapid expansion of smelter capacity in China, the Middle East and India will cause a supply glut in 2012. But electricity and other issues will restrain capacity expansion in China helping to tighten the market."

Marubeni expects term aluminum premiums, the amount Japanese buyers pay above LME cash prices to range from USD 110 to USD 135 in 2013 rising from the USD 110 to USD 130 range in 2012 with a recovery of the global economy.

Marubeni expects global aluminum demand to grow 7.3% both in 2012 and 2013 but supply to rise 7% in 2012 followed by 5.1% gain in 2013. In China alone, the market will see a deficit of 10,000 tonnes in 2011 with the deficit widening to 50,000 tonnes in 2011 and to 500,000 tonnes in 2013. Japanese trading houses are boosting investment in aluminum smelting facilities betting on steady demand growth in Asia.

Marubeni said that last month it would spend about USD 180 million to double its stake in Aluminerie Alouette, North America's biggest aluminum smelter to 13.33% to tap growing demand in emerging economies.

Sumitomo Corporation of Japan also plans to boost its aluminum business in Asia as its Malaysian aluminum affiliate Press Metal plans to double its annual capacity to 240,000 tonnes by 2014.

(Sourced from Reuters)