Australia’s Department of Industry lowers price forecast for alumina and aluminium over next three years

Australia’s Department of Industry on Monday it has lowered  its aluminium price forecast for 2019 by 5% from its June forecast to US$1,793/t due to the bearish market conditions driven by trade tensions between the US and China. The revised forecasts were published in its latest Resources and Energy Quarterly report.  The department also lowered its aluminium price forecast for 2020 by 14% to US$1,662/t and for 2021 by 20% to US$1,545/t.

“Escalating trade tensions between the US and China continue to damper aluminum demand from China, the world’s largest aluminium consumer,” the department said.

The department has cut down its alumina spot price forecast for 2019 by 5% to US$356/t, for 2020, by 6% to US$334/t and for 2021, by 9% to US$316/t. The alumina price forecast was driven by an oversupplied international alumina market. The surplus was primarily driven by slow growth in aluminium production and higher alumina production due to the resumption of Alunorte, the start-up of Al Taweelah in the UAE and the ramp-up of Fria in Guinea. 

The department has also lowered its forecast for global primary aluminium consumption in 2019 by 3% to 64.48 million tonne. It has cut 2020 consumption forecast by 8% to 63.53 million tonnes and 2021, by 13% to 62.42 million tonnes respectively.

Australia’s Department of Industry has also cut down its price forecasts for other base metals like lithium and zinc over the three-year outlook period. It has projected a price rise for copper and nickel.