Slump forecast for Aluminium Industry, 2020: Jean Simard, CEO and President of Aluminium Association of Canada

The Canadian aluminium industry is in for a slump year as the demand for the metal is projected downswing.

Mr Jean Simard, CEO and President, Aluminium Association of Canada communicated that global overproduction of the metal combined with a general economic slowdown around the world, and the probability of recessions would further affect the export of Canadian aluminium.

The President said “We are at the end of a very long, probably the longest manufacturing cycle in our history. We had ten years of constant growth and demand in our economy. There is still growth in demand but it’s not at the same pace as it has been in the past ten years.”

Mr Jean Simard’s was straight to put up a finger towards China’s rampant production of aluminium. He said “They produce 57 per cent of all the aluminium produced in the world. In the past 20 years, China has produced 260 million tons of aluminium, whereas North America over the last 100 years has only produced 240 million tons. They produce faster and keep adding capacity. It’s an unruly market not dictated by normal market behaviour.”

Mr Simard even added by saying that the situation was worsened by state-sponsored production, larger players and the increased shipping of finished and semi-finished products onto the world market, factors which are eroding Canada’s market share of especially the American market. He said “China over subsidizes aluminium production in that country by three to eight times. One company alone benefitted from $35 billion in state subsidies.”

He further indicated that tough import legislation to protect local aluminium production by the global high producing governments was not so much constructive as it was expected. He said very nicely “aluminium is like water, finding the path of least resistance into markets despite tariffs.”

He concluded by saying: “The global price of aluminium in 2020 is expected to fly between USD1,600 to USD 1,700 per ton. This is not good news and it means another tough year for Canadian aluminium producers.”