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Analysts Predict Higher Prices for Aluminum
Edited by : AL CIRCLE
2 min read
Analysts at Harbor Intelligence’s Annual ‘Aluminum Outlook Conference’ are predicting stable to higher aluminum prices on the year. Despite high inventories of aluminum in warehouses, the analysts agree that demand growth and a looming supply issues in China will move the price higher. A poll of conference participants showed that 75 percent of respondents expected prices to average upwards of $2,600 per tonne in 2012, a majority also concluded that the regional premiums would increase.
Jorge Vazquez, founder and manager of Harbor Intelligence, had a more positive outlook forecasting prices to be above $3,000 per tonne on in 2012.
In his presentation at the conference, Vasquez laid out strategies to forecast aluminum prices. The key highlights included Chinese inventory levels, the effect of Chinese coal/energy prices, as well as gauging warehouse inventories through cancelled warrants.
China has been struggling with high energy costs. In April the Chinese government capped annual output capacity growth rate for 10 nonferrous metals, including aluminum, at 8 percent in an effort to reign in power usage. The production of aluminum is an electricity intensive process, using more than 15 Megawatts of power to produce one ton of the metal. The majority of the nation’s power supply comes from coal fired plants therefore, Vasquez argues, the coal price is a key indicator of price.
Jorge Vazquez, founder and manager of Harbor Intelligence, had a more positive outlook forecasting prices to be above $3,000 per tonne on in 2012.
In his presentation at the conference, Vasquez laid out strategies to forecast aluminum prices. The key highlights included Chinese inventory levels, the effect of Chinese coal/energy prices, as well as gauging warehouse inventories through cancelled warrants.
China has been struggling with high energy costs. In April the Chinese government capped annual output capacity growth rate for 10 nonferrous metals, including aluminum, at 8 percent in an effort to reign in power usage. The production of aluminum is an electricity intensive process, using more than 15 Megawatts of power to produce one ton of the metal. The majority of the nation’s power supply comes from coal fired plants therefore, Vasquez argues, the coal price is a key indicator of price.
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