LONDON, April 9: The aluminium industry will need almost 10 million tonnes of extra metal in 2015 to cope with growing world demand, the Economist Intelligence Unit said on Thursday.EIU commodities editor Karen St Jean told an analysts' briefing that growth in primary aluminium demand would be 2.3 percent over the next two decades."Capacity will remain adequate until the year 2002. By 2015, the industry is going to need an extra 9.8 million tonnes a year," St Jean said.
She said the shortfall would be in addition to existing capacity.
In an EIU report on aluminium to 2015, the unit forecast world consumption of semi-finished aluminium to increase in the long term by 2.7 percent per year.
"The forecast for Western countries is 2.4 per cent per year and for the Eastern countries 4.5 percent per year because of recovery in Eastern Europe and Russia and continued strong growth in China.
"Semi-finished aluminium consumption is forecast to grow at two per cent per year in the OECD countries and 4.1percent in the non-OECD countries," the report said. St Jean said demand will taper off in each region of the world to 2015 with the exception of Eastern Europe where demand for aluminium will increase.
"The increase in recycling will have an impact here," St Jean added.The transport sector was forecast to be the most rapidly expanding market until 2015. Growth in this sector will be around 3.4 percent per year in Western Countries compared to current growth of around five percent.
The report forecast consumption in the United States would be 6.514 million tonnes by 2015 from around 5 million in 1996 and a forecast 5.78 million tonnes in 2005.
Western Europe's aluminium consumption would increase to a forecast 7.55 million tonnes by 2005 from 5.48 million tonnes in 1996 and a forecast of 6.3 million tonnes by 2005, the report said.
Latin American consumption was forecast at 1.668 million tonnes by 2015 from 919,000 tonnes in 1996 and 1.26 million tonnes in 2005.
St Jean said there had been a fall inreal terms in aluminium prices and this will continue.
With the average price for London Metal Exchange (LME) three-months aluminium last year at $1,619/tonne, St Jean said prices will continue to weaken until at least 1999. She forecast aluminium will hit a low of $1,350 a tonne by the third quarter of 1999, after which the aluminium price will trend upwards in the long term.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
