LONDON, Nov 5 - Aluminium demand is improving albeit slowly, but production restarts outside China are likely to be few and far between and prices are likely to hold in their recent range in the next few months, some analysts say.
But others are concerned that current prices will prompt more reactivations and condemn the market to a long period of over-supply.
"Aluminium prices are likely to remain rangebound in November and December, probably between $2,100-1,800 or possibly down to $1,750," said Massimo Rossi, a senior analyst at industry consultants CRU Group.
"We don't see much upside," he added.
Rossi said demand was improving but slowly from very low levels, with developing economies performing better than others.
But independent consultant Angus MacMillan was more concerned that current prices would prompt more production restarts.
"Aluminium will stay in structural surplus for the foreseeable future unless we see renewed producer discipline," said independent consultant Angus MacMillan.
He said production was rising in both the West and China, with most producers covering their cash costs at current prices.
At 1112 GMT the London Metal Exchange three-months aluminium price
was indicated at $1,911/21 a tonne.
Rossi did not expect major smelter restarts outside China.
David Wilson, director of metals research at Societe Generale, meanwhile, said he expected prices to be in for a period of sideways trading, albeit in volatile conditions.
He also saw some tentative signs of improving demand from the U.S. car industry, but wondered whether there would be sufficient self-sustaining momentum following the boost from the car scrappage system.
Below are some of the more significant recent developments in production, stocks and prices that may influence the direction of the market in the rest of 2009 and into 2010.
PRODUCTION:
Oct 29 - Yunnan Metallurgical Group, the parent of Yunnan Aluminium Industry <000807.SZ>, and the government of Zhaotong city have signed an agreement to build a plant with one million tonnes a year of aluminium smelting capacity, industry and city officials said. The plant, if built, could be operated by Yunnan Aluminium. Yunnan Aluminium already operates 400,000 tonnes a year of smelting capacity and is building a plant to produce alumina in Yunnan province. [ID:nHKG2793]
Oct 29 - China produced 9,089,100 tonnes of primary aluminium in the first nine months of the year, down 7.6 percent from a year earlier, according to figures released by the National Bureau of Statistics. Output of alumina fell by 4.9 percent over the same period to 16,600,400 tonnes. [ID:nAPI000642]
Oct 23 - Primary aluminium production in China rose to 1.219 million tonnes in September from 1.153 million tonnes in August and 1.156 million tonnes in September last year, provisional figures from the International Aluminium Institute showed. [ID:nLN580346]
Oct 20 - Daily average primary aluminium output rose to 63,200 tonnes in September from a revised 63,100 tonnes in August, provisional figures from the IAI showed. [ID:nLK379205]
Oct 16 - Cameroon Alumina Ltd has found 550 million tonnes of bauxite deposits at the Ngaoundal and Minim-Martap properties in the country's Adamawa region, a company official said. Cameroon Alumina Ltd is a joint venture set up in 2008 by Dubai Aluminium Company Ltd and India's Hindalco Industries , which each have a 45 percent stake, along with U.S. firm Hydromine Inc. which holds the remaining interest. The company hopes to build a mining operations at the site that would produce 4.5 to 9 million tonnes of bauxite per year starting in late 2014 and an alumina refinery with a capacity of 1.4 to 3 million tonnes. [ID:nLJ11534]
Oct 15 - Rio Tinto said it has scrapped its plan to build an aluminium smelter on the southern coast of South Africa due to power shortages in the country. Rio Tinto has been delaying the project due to an electricity crisis that brought the country to a halt last year. [ID:nLF682057]
Oct 15 - Guinea is in talks with China Investment Fund on a $7 billion deal to create a mining joint-venture company in the world's top bauxite supplier, the mines minister told local media. The deal would not pose a risk to any existing mining deals in the country, home to international miners Rio Tinto and UC RUSAL, the minister told Guineenews.org in an interview.
Oct 14 - Mining operations and daily life mostly returned to normal in Guinea after a two-day strike called by unions in reaction to a bloody crackdown on anti-government protesters on Sept. 28 brought the No. 1 bauxite exporter to a halt. Officials from the Guinea Bauxite Company -- a joint venture between Anglo-Australian Rio Tinto and U.S. Alcoa that ships bauxite -- and Russia's UC RUSAL, which runs an aluminium refinery and some mining operations, said business had resumed. [ID:nLE281118]