World aluminium shortage to drop

The demand-supply gap in the global aluminium market is expected to shrink substantially in CY07 due to enhanced global capacity coming onstream. According to London-based Natexis Commodity, demand for aluminium is expected to exceed supply by just 100,000 tonne.

In contrast, in CY06, the deficit in aluminium supplies was estimated at 400,000 tonne. Analysts at foreign brokerage houses point out to several expansion projects coming onstream for the narrowing gap "� for instance, the 657,000 tonne additional capacity of AWAC has just been completed in western Australia.

Aluminium currently trades at around $2,736 a tonne on the LME, while Natexis Commodity has forecast an average price of $2,600 a tonne for the non-ferrous metal in CY07. Aluminium prices had averaged to $2,567 a tonne in CY06, points out Natexis.

Meanwhile, Hindalco has recently completed phase-I of the expansion of its aluminium smelting capacity in Hirakud from 65,000 tonne to 100,000 tonne. The phase-II of the expansion, which will raise aluminium smelting capacity to 143,000 tonne, is currently being implemented.