Aluminum faces first deficit in nine years on output cuts: Sumitomo

Japanese trading house Sumitomo Corp., which has stakes in smelters from Brazil to Australia, forecast aluminium will face a deficit next year for the first time ever since 2006 as lower prices accelerate output cuts.
“Global demand will outpace supply by 37,000 metric tonnes in 2015 from a surplus of 312,000 tonnes estimated for this year,” said Shingi Yamagiwa, manager of light metals trading at the Tokyo-based company.
Aluminium prices are down 18% last year on the LME. Top producers such as Rio Tinto Group, United Co. Rusal, and Alcoa Inc. have already announced their output cutbacks. China has made efforts to cut down the capacity of its plants which account for almost half the world output, resulting in low prices in an over-supplied market.
“Western producers will continue to cut output, while China will adjust its production soon as the price of electricity pressures high-cost smelters,” Yamagiwa told in an interview. The demand for global aluminium may exceed total output by 390,000 tonnes this year, Macquarie Group Ltd said, the demand for aluminium is improved and output is cut down amid unplanned closures and bankruptcies. Deutsche Bank AG forecast a 5.6% increase in global use of aluminium this year with demand growth in China at 9.5%.