Aluminium prices are expected to fall by 11% to an average $2,260 per tonne in 2007 from an expected $2,540/t in 2006, according to Australian government research institute ABARE.
Global consumption growth is expected to remain healthy, coming in at just under 7% next year after 7% expansion this year. China will remain the driver with expected consumption growth of around 19% next year, while the US will ease further after an anticipated 5% decline in consumption this year due to weakness in the key automotive and residential home sectors.
However, global production is expected to accelerate by 8% next year on a combination of new capacity (Russia and Iceland), capacity restarts (US and Germany) and low alumina prices encouraging greater capacity utilisation in China.
As such production is expected to exceed consumption next year, resulting in "a moderate increase in stocks", ABARE said.
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