Aluminium demand growth is outpacing even the more bullish forecasts of the last few years, Alcoa’s president of global primary products, Timothy Reyes, told delegates at Metal Bulletin’s 19th Bauxite & Alumina Conference in Miami.
In 2010, Alcoa ceo Klaus Kleinfeld was among a number of top executives predicting rapid demand growth over the next decade.
Kleinfeld said demand would double between 2010 and 2020, but Reyes reported that demand growth over the last two years has exceeded expectations.
“Aluminium demand remains outstanding – you can’t argue against the merits of the metal,” Reyes said.
“We said that demand would grow by roughly 6.5% per year, but so far we’re looking at 8.5% growth.”
Reyes pointed to the trend of light-weighting in the auto industry and growth in emerging markets – especially China – as drivers for the demand growth.
But low prices due to overproduction have masked this otherwise bullish market development, even as financing deals tie up the excess units so the market is broadly balanced.
“The aluminium market is balanced, but about 30% of production is losing money,” Reyes said.