Goldman Bank analyst James Gutman stated at the 21st International Aluminum Conference at the Metals Herald in Moscow -
In 2008, the international aluminum market is optimistic, prices will increase, demand will increase, supply will have some pressure, and there will be gaps. Although the current spot price of LME aluminum is lower than the March futures price, the March futures price is higher than the 15th futures price, indicating that the market has doubts about the supply of aluminum in the future. In general, the relationship between spot prices and March futures prices is closely related to the relationship between the March futures price and the futures price in 15 months, that is, if the March futures price is higher than the 15 futures price, then The spot price is also higher than the March futures price, and vice versa. However, the current situation is not the case. The current supply of aluminum is not tense, but this may not be the case in the future. Although stock exchanges are not particularly tight now, the dominant inventory is at a historical low, so that the future aluminum market is optimistic. As a substitute for copper and zinc, the demand for aluminum is growing and supply will continue to grow at the same pace as demand. Alumina prices have fallen sharply, and recent prices have fallen to levels close to FOB 200 USD/ton, which has led to lower production costs for aluminum producers. However, by 2008-2009, the supply and demand of the alumina market may return to balance, and China's new production capacity will be greatly reduced.
Macquarie Bank analyst ADAM ROWLEY’s view is similar to that of JAMES GUTMAN, and ROWLEY said—
In the long run, the aluminum market will behave as a bull market, mainly because China's demand is strong, but this situation does not occur in the coming year. Over the past five years, aluminum prices have almost doubled, copper, nickel and zinc prices have risen by 464%, 612% and 348%, respectively. At present, aluminum inventories are at historical lows, and smoke is only enough to maintain consumption for less than six weeks. This can be seen as tight supply, which has already been reflected in the price, but not as much as other metals. The decline in inventory is relatively slow. At present, the aluminum market only shows a modest gap. If the inventory is rapidly reduced, it will inevitably cause market panic. If prices rise rapidly, China’s exports will increase, especially at present, with abundant supply of alumina and a significant drop in prices. Of course, there are signs of a slowdown in world economic growth in 2007, which means that aluminum demand growth is also weaker.
At the same time, China’s domestic alumina production growth is surprising. It is expected that in 2007 and 2008, China’s alumina production will reach 19 million tons and 25 million tons, respectively. This year, the alumina price has dropped from 640 to 650 US$/ton in April to the current 290 to 310 US$/ton. This is a good opportunity for China to rapidly increase aluminum production. It is estimated that it will show up in the coming months and China can do this. It is estimated that China's aluminum production will reach 9.2 million tons and 1.5 million tons this year. New production capacity without production. At present, the operating rate of China's aluminum smelters is about 80%. As long as China has idle production capacity, the possibility of aluminum prices soaring is unlikely. Based on the above reasons, the aluminum market is unlikely to behave like a bull market like other metals. Moreover, it is generally believed that the world economic growth in 2007 will be inferior to that of this year, and the demand for metals will be weakened. This will affect prices, especially in the United States and China. The gains in growth are therefore offset, and it is estimated that the growth rate of the world economy in 2007 can still be maintained at 6%. The supply of alumina is sufficient, and the low price makes China's aluminum production and exports increase rapidly. In 2007, the aluminum market will have a modest surplus. It is expected that there will be a surplus of 100,000 tons, and the inventory will not increase much. The price is slightly lower than this year, and the world in 2007 The slowdown in economic growth and the increase in export volume of aluminum and alumina production in China make the aluminum market difficult to see a bull market. Similar to that of JAMES GUTMAN, he also believes that global aluminum demand will accelerate and exceed supply after 2007. He also believes that from now until 2010, the average annual growth rate of aluminum demand will remain at 5-6%, largely due to China's demand, so that the annual supply needs to add 2 million tons of aluminum and 4 million tons Alumina. If China's aluminum demand maintains a 20% increase, it will be increasingly difficult to meet the demand in the long term. To take a step back, even if China's aluminum demand slows down significantly, the next 10 years, that is, from 2010 to 2020, aluminum demand growth will reach 20 million tons, requiring alumina to grow by 40 million tons. He said that in the long run, even if China's surplus production capacity is fully utilized and aluminum smelting enterprises are fully loaded, it is not enough to ensure that there will be no shortage of supply. At that time, the demand will be difficult to meet and the price increase will be inevitable. After 2007, if China's aluminum demand continues to increase at an annual rate of 15 to 20%, the aluminum market bull market will emerge.
Another analyst from the DAVENPORT EQUITY RESEARCH, LIOYD CARROLL, expressed at the 2006 Recycling Industry Association Roundtable Forum in Chicago -
It is expected that China's aluminum demand will slow down in the next few years, especially after the completion of the infrastructure projects required for the Beijing 2008 Olympic Games. This part of the demand has greatly promoted the growth of demand, and this part of demand will decrease after 2008-2009. China's annual aluminum consumption growth rate is 22% higher than the United States by 1/3. China's demand is growing rapidly. European demand is also increasing. U.S. demand is modestly increasing, but next year's economic growth may slow demand growth. It will look dull. At present, global aluminum demand is better than people expected, and supply growth is insignificant. In the medium term, the aluminum market will behave as a bull market. In 2006, the market was strong and even better than in 2007.
Analysts who spoke at the 21st International Aluminum Conference of the Metals Herald predicted that the average spot price of LME aluminum in 2007 would range from 2270 to 2400 U.S. dollars per ton, and ROWLEY’s forecast was more optimistic, at 2400 U.S. dollars per ton. AHMADZADEH from Mitsubishi estimated that At $2,325/t, the metal guide’s GAYLE BERRY believes it is at $2,270/t.
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