Short Aluminium Supply in 2006, Sumitomo Corp.

Sumitomo Corporation said primary aluminium ingot demand increases by 4.1% to 33.115 million tonnes in 2006. The firm expects the supply increases by 2.5% to 32.697 million tonnes. The balance turned in to 418,000 tonnes of shortage. The firm said the aluminium 3-month futures price is US$ 2,000-2,600 per tonne at London Metal Exchange. The firm forecasts that the demand would increase each country and each region including Japan and the supply would decrease in North America and Western Europe. The firm expects smelters could stop operation and reduce output in North America and Western Europe due to the higher electricity cost. The firm expects the LME primary aluminium ingot price keeps firm in January-March and April-June and the price will turn into weak in second half of the year. The firm said the price could keep more than US$ 2,000 per tonne due to the tight supply and speculative money flow for the metal. The firm expects the price will strong between spring and summer when China reduces the export and Western Europe reduces the output.