ISRI Conclave Predicts Robust Growth Prospects to Global Aluminum Demand

SPOKANE (Scrap Monster): The 2017 ISRI Commodities Roundtable Forum has predicted improved demand growth for global aluminum demand during the rest of the year. The global market is expected to report marginal surplus during the year. Meantime, the participants expressed deep concerns over Chinese overcapacity issues. The views and concerns were raised during the Aluminum Roundtable session held as part of the three-day Forum Sep 6-8 at the Chicago Marriott Downtown Magnificent Mile.

According to Andrew Estel, vice president of strategic planning and analysis, Alcoa, the global aluminum market is expected to end at marginal surplus of nearly 1% during the year. However, the Chinese market surplus would be even higher in the range from 2.2% to 2.4% in 2017. The overcapacity issues in China continue to pose great threat to the global aluminum industry, Estel noted.

Estel predicts strong demand growth from Asian region. The global aluminum demand is expected to grow by 7% in 2017 over the previous year, mainly on the back of huge demand growth by China. The Chinese demand is expected to total around 34 million tons, accounting for more than half of the global primary aluminum demand. The demand from the country’s transportation and construction sectors will acts as major drivers to aluminum demand growth. The aluminum demand in India is projected to grow around 7% in 2017.

Meantime, the European region is expected to post 3.5-4% aluminum demand growth during this year. The flat to moderate demand from the country’s automotive sector may result in 1.5-2% demand growth for the metal in the US.

The Aluminum Association representative, who spoke at the Roundtable, stated that aluminum consumption by North American transportation sector is likely to increase significantly. Based on studies, it is projected that the aluminum content in vehicles may increase drastically from 397 pounds per vehicle (PPV) in 2015 to as high as 565 PPV by 2028. The consumption of aluminum by the North American vehicle industry is forecast to total around 9 billion pounds by 2028, said Ryan Olsen, vice president of business information and statistics for the Association.

Mike Southwood of London-based CRU Group stated that imports of aluminum can stocks by the US skyrocketed by 84% in H1 2017. The imports from China accounted for 74% of total imports during this period. He expressed concerns regarding the proposed restrictions on scrap imports by China. Incidentally, zorba makes up almost 80% of the aluminum scrap exported by the US to China. Fortunately, this scrap falls under Category 6, which does not come under the proposed controls.