Reuters reported that the outlook for aluminum demand for the remainder of 2011 is shaky in the debt-troubled economies of the West which has discouraged consumers from filling all their 2012 needs for now.
Ms Christel Bories CEO of Constellium said that "I cannot imagine we will have a very soft landing, for the simple reason that the banks are sitting on a lot of liquidity that they don't lend any more. All this can only have some impact on the economy. How will it impact? It's still difficult to say. For Europe at least, I am not optimistic for the end of the year and the beginning of next year, I am not optimistic at all. There will be a ripple effect of what is happening in the financial system to the real economy."
China, the metals market savior during the 2008 recession may not give a repeat performance at least not with such robust results and is unlikely to be a major importer of aluminum.
According to Macquarie, consensus pegged Chinese demand growth at double digits this year leading to a market deficit in the H1. However, the market is expected to rebalance this year as smelter production resumes following an end to seasonal curbs on power usage in China.
Executives from Rio Tinto Alcan and top aluminum producer UC Rusal said that with the demand side uncertain but steady, instead, price support is coming from escalating input costs like energy and coking coal. Rusal sees aluminum prices in a range of USD 2,500 per tonne to USD 2,600 per tonne in 2012 up 5% to 10% from current levels of USD 2,365 for three month aluminum on the London Metal Exchange.
Car maker PSA Peugeot Citroen said that in the auto industry, new European carbon emissions laws to take effect in 2020 is driving aluminum uptake, as carmakers seek to boost per kilometer efficiencies by raising the content of the light metal.
Dutch construction firm Bayards said that smaller success stories were seen in growth markets for the super rich such as helicopter landing pads as well as offshore construction. Other sectors holding up well included the aerospace sector, a smaller segment of aluminum demand.
Plane maker, Airbus part of aerospace group EADS said that has seen no impact on its business so far from the current economic climate. While the so called mating season for North American 2012 contracts for semi finished products in particular begins in earnest later this month, premiums paid for physical metal are unlikely to see such strong gains as in the past.
(Sourced from Reuters)
