Aluminum production is rising globally

 Metal Miner reported that a recent in Reuters by Andy Home paints a rather depressing picture of the aluminum market if you are a producer. But if you are a consumer, some would argue it appears much rosier.

The article essentially details rising production around the world and only slowly rising demand. The result of that could be stable prices for some years to come, underpinned by the cost of production and financing deals soaking up excess production.
We have been used to reports of rising Chinese production with modest cutbacks in the West but what we have seen in recent months is rising production in the West in addition to China. True, global run rates dropped in January but the previous three months had seen a steady rise with the IAI forecasting smelter capacity outside China to rise by 5.5% this year and by another 3.7% next year.
That represents the addition of around 2.5 million tonnes annualized over the 2 year period. The growth this year is expected to come primarily from the Gulf region and non China Asia.
The first hot metal was produced in December at the 740,000 tonne per year Maaden and Alcoa integrated smelter and alumina project in Saudi Arabia, with ramp up over the next two years. This will help take Middle East production to 5.4 million tonnes by 2015 more than double the production from 2009 of 2.4 million tonnes.
Meanwhile Rusal, which made much noise about rationalizing capacity and indeed is gradually closing production at older, less efficient smelters in the western part of Russia is at the same time raising production at lower cost, larger Siberian smelters.
Mr Yao Xizhi senior analyst at state research house Antaike said that “In China, new capacity continues to be added in the lower cost northwest provinces with aluminum production growing by 11% last year and a similar rate of expansion is expected this year.”