World Primary Aluminium Oversupply in 2007, Mitsui

World primary aluminium supply will turn into 185,000 tonnes of oversupply in 2007, according to outlook by Mitsui Bussan Metals Sales, which is Mitsui & Co’s nonferrous metal sales force. The supply increases by 8.6% to 36.246 million and the demand increases by 7.0% to 36.061 tonnes. The firm expects the 3-month price at London Metal Exchange will decrease to US$ 2,200-2,700 per tonne in October-December from US$ 2,500-2,900 in January-March. The firm expects the demand will grow in 2007 as 2006. The USA demand will increase due to recovery in second half of the year despite of decrease mainly for construction applications. The Chinese demand will keep the high level growth with around 10% economy growth.The firm expects the supply will increase by 8.6 in 2007 from 2006 compared with 5.2% growth in 2006. The firm expects the US smelters restart the operation due to lower electricity cost under lower crude oil price. The Chinese output will reach the first 10 million tonnes despite of the lower growth than 2006. The firm expects LME aluminium ingot price will decrease in second half of 2007 due to launch of new capacities. However, the firm expects the price could renew the record of US$ 3,300 per tonne in 2006 with speculation money inflow and other factors. The firm expects Japan premium will be US$ 60-80 per tonne at CIF Japan in October-December.