Marubeni forecasts global aluminium supply shortage, anticipates premiums in Japan

Marubeni's Light Metals Department has highlighted a looming supply shortage of 385,000 t of global aluminium in 2024, with expectations that the deficit will surpass 1 mnt by FY'26. While FY'23 anticipates an oversupply, factors such as the growth of emerging economies, increased use of aluminium in automotive electrification, and packaging containers contribute to the widening supply-demand gap, according to Japan Metal Daily.

In FY'24, global aluminium demand is projected to rise by 2.9% to 72,215,000 t, slightly outpacing a 2.1% supply increase to 71.83 mnt. China, as the largest producer and consumer, foresees a 2.4% demand hike to 43.303 mnt, with a 2.5% supply increase to 42.361 mnt. Any supply deficit in China is anticipated to be met through imports from other nations.

Major industries show varied demand trends in FY'24, excluding a 1.2% decline in construction. Transportation, led by automobiles, is expected to grow by 4.8%, containers and packaging by 2.3%, and electricity, particularly solar power, by 6.8%. Recovery from China's real estate downturn is anticipated to be gradual.

The discussion also addressed Japan's pursuit of green aluminium, emphasising its limited supply. While the estimated import volume of new aluminium ingots in FY'23 is 1.1 mnt, Marubeni suggests Japan's potential green aluminium source may only reach 500,000 t, necessitating future premium payments comparable to those in Europe.

Regarding Japan's aluminium premium, expectations suggest a bottoming out in the January-March quarter of FY'24, rebounding thereafter. Contract negotiations for the upcoming quarter are underway, with producers proposing $95/t, a 2% decrease from the previous quarter. Settlements are anticipated to range from $75 to $95, but projections for subsequent quarters indicate a range of $90 to $150. Premium negotiations with Japan are conducted quarterly.

Note: This article has been published in accordance with an article exchange agreement between JMD and SteelMint.