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Aluminum In 2017: Deficit Or Surplus?
- Apr 08, 2017 -

For commodity companies  the industry outlook is as important, if not more important, than their positions in the industry.

When production exceeds demand, markets  are in a surplus condition. A deficit occurs when demand exceeds production. According to most estimates, including those of producers,aluminum markets were in a deficit in 2016. Let’s see what senior aluminum executives had to say about the aluminum industry’s 2017 balance.

Excluding China, the world is expected to be in a deficit of 1.5 million–1.7 million metric tons, resulting in a global surplus of 0.4 million–0.8 million metric tons, in 2017. 

Norsk Hydro expects global aluminum demand to rise 3%–5% YoY (year-over-year) in 2017. The company expects Chinese aluminum demand to rise 4%–6% YoY in 2017, and it expects China’s primary aluminum production to rise 7%–9% in the year. Norsk Hydro expects aluminum markets to be in balance this year, with expectations of a small surplus.

Several Chinese cities are grappling with high levels of air pollution.The Chinese government is aware of these rising pollution levels, and it has announced several reduction measures.The most notable of these measures are shutting down outdated steel and coal capacity and moving toward cleaner energy sources. China is also planning to cut its excess aluminum capacity.