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UPDATE 1-Aluminum market to return to balance but more cuts needed -Rio Tinto

Published 2015-09-22, 12:36 p/m
UPDATE 1-Aluminum market to return to balance but more cuts needed -Rio Tinto
RIO
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(Adds market background, additional context)
VANCOUVER, Sept 22 (Reuters) - Global aluminum demand will
rise by 24 million tonnes to reach 78 million tonnes a year by
2025, a Rio Tinto (LONDON:RIO) executive said at an industry conference on
Tuesday, but oversupply will continue to force further capacity
closures.
"Demand for our products is clearly healthy," Alfredo
Barrios, Rio Tinto's chief executive for aluminum, said at Metal
Bulletin's International Aluminum conference in Vancouver. "The
issue we face is excessive supply."
The aluminum market should return to balance in the next
five years, Barrios added.
China, the world's leading producer and consumer of
aluminum, has maintained production at stubbornly high levels
even as smelters in other parts of the world close. This has
prompted industry complaints that Chinese production decisions
are not made with supply-and-demand factors in mind.
ID:nL1N11O2PM
However, he added that Chinese supply and demand would be
balanced over the medium and long term.
With continued demand growth and further curtailments,
Barrios said, the price of aluminum would "revert back toward
the marginal cost of production in a few years."

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