Aluminum producers buoyant on Russian demand outlook

Over the last year aluminum prices have increased from USD 1800 to more than USD 2600 per tonne with major manufacturers seeing further upside ahead.

The World Bureau of Metal Statistics said that in the Q1 of 2011, global demand for aluminum in the world amounted to 10.07 million tonnes, 360,000 tonnes more than during the same period last year.

Rusal expects the demand for aluminum to grow by 13% this year up to 46 million tonnes with the biggest demand will be seen from BRIC countries and Russian demand up by 22% on the back of rising demand from car manufacturing, construction and packaging industries. Russian aluminum producers are expecting the price per tonne to be USD 2700 per tonne in 2011.

Alcoa sees demand rising 6.5% annually with the company seeing Russian demand expected to grow significantly on new environmental standards in the auto sector according to Mr Daniel Cruise VP of Alcoa.

Mr Cruise said that we have strong business in Russia. We have been here since 2005 and we have invested USD 750 million in the market. We see growth in this market. So, we are going to focus on Russia. What we are trying to do in Russia now is increase productivity and just make sure that our plans reach the level of productivity that is consistent globally. We what we seeing is aluminum growing, aluminum demand growing.

He said that if we look at the market like China where we see aluminum demand growing by 15% in 2011 and then if we look at the Russian market where the demand growing 11% this year, so it is a double digit growth for aluminum. There is a lot of substitution going on. Car change into aluminum there is a lot of light weighting in vehicles, trucks and cars where you need to meet new emission and gas standards and so a lot of people are shifting to aluminum.