World Primary Al Oversupply to Narrow in 2009, Sumitomo Corp.

World primary aluminium demand increases by 0.1% to 39.03 million tonnes in 2009 from 2008, according to outlook by Sumitomo Corporation. The firm expects the supply decreases by 2.5% to 39.165 million tonnes and the balance is 135,000 tonnes of oversupply. The balance is oversupply for 3 years in a row but the supply gap decreases by around one million tonnes.

The firm expects the price is US$ 1,350-2,000 per tonne at London Metal Exchange in 2009. The firm expects the higher inventory impacts on the market price. The firm forecasts the price could exceed US$ 2,000 in 2010.

The firm expects the demand decreases in Japan, USA and Western Europe in 2009 from 2008 due to slower economy and lower automobile production. The firm expects the demand in China increases despite of slower growth.

The firm expects the largest supplier of China reduces the production in 2009 from 2008. The firm expects the supply could increase in Asia and Middle East due to newly starting capacity.