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The Aluminium Market Analysis, Financials and Forecasting 2012-2017

Global aluminium market estimated to be valued at US$112Bn in 2012

The global aluminium market will reach a value of $112.3bn in 2012 and will rise mainly due to demand from transport and construction end-use sectors; both sectors together will account for more than half of the global aluminium consumption. The growth in the market will be lower in 2012 compared to the previous year, due to low aluminium prices and weak demand. It is anticipated that, in the likely scenario, aluminium prices will remain under $2,400 per tonne during 2012.

The recent announcement of capacity cuts by major aluminium producers will curb the downward trend in aluminium prices. However, the presence of high volume of aluminium stock in warehouses for speculative purposes will keep the prices somewhat unpredictable and subsequently affecting the aluminium market.

Unlike other metals, the aluminium industry has been equally affected by both market and non-market forces for almost two decades. Currently, the aluminium market is experiencing the substantial influences of poor global economic growth, which is largely affecting the prices of aluminium prices and demand for aluminium from its end-use sectors. The ongoing global economic situation has not set a favourable condition for the aluminium market in the short term. Going forward, as the global economic condition improves; the aluminium market performance will also meliorate. This analysis anticipates that the value of the global aluminium market in 2012 will reach $112.3 billion.

The surplus production capacity coupled with low demand, high stock volumes and lower interest rates will keep the aluminium prices under pressure during 2012 and likely until first half of 2013. This analysis anticipates that, in the likely scenario, aluminium prices will stay below $2,400 per tonne in 2012.

Aluminium is one of the most versatile and essential materials for the global economy. The commoditys extensive properties, including strength, conductivity, recyclability, and lightweight make it the worlds second most used metal after steel. Aluminium is consumed in almost every industry; however, out of all these industries, the construction and automotive industries are the largest consumers, consuming over half of the total aluminium consumption. Analysts foresee the construction and automotive industry will remain the largest aluminium consuming sectors in the five years. The packaging industry, which was the third largest industry after construction and transport sectors for aluminium consumption in 2011, is expected to display the highest growth rate in the next five years.

China will continue to dominate the global aluminium market by significantly increasing its share of global aluminium consumption over the next five years. The Chinese aluminium Industry will foresee a boom in the residential and infrastructure markets which will drives its aluminium market. However, the countrys aluminium producers will keep suffering from the high cost of production due to high energy costs and the governments further restrictions on the usage of electricity.

Looking over the supply-side, the market is shifting towards the Middle East due to the availability of cheap energy in the region, while aluminium producers in Western Europe and Northern America are continuously mothballing or permanently removing their production capacities to reduce losses. Moreover, the rising aluminium production capacity in China is a major concern for aluminium produces around the world.

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