Daily Management Review

Rio Tinto: Aluminum reserves will decline sharply in the next 2-3 years


11/19/2018


Rio Tinto: Aluminum producers will need to create additional smelting capacity outside of China, as metal reserves will drop sharply in the next 2-3 years, predicts Alf Barrios, head of aluminum operations at Rio Tinto., aluminum reserves will decline sharply



hebdromadaires
hebdromadaires
"We are seeing extremely strong growth in demand for aluminum," Barrios said in an interview with Bloomberg.

"Many hoped that in the future, China will become a net exporter of aluminum with a significant margin in favor of exports, but it is already clear that the aluminum sector in China is becoming more balanced," he said.

The stocks of primary aluminum, monitored by the London Metal Exchange (LME), had been falling in July-September for the second quarter in a row, and in September their level fell to a minimum since 2007.

Goldman Sachs experts believe that the market is too calm about the potential risks associated with a decrease in aluminum reserves. In the next couple of years, the metal reserves could be reduced to record lows, Barrios said.

"China still has reserve capacities for the production of aluminum, and they will be involved in the conditions of growing demand for the metal," he said.

"Now is a turning point that could change the trend in aluminum smelting capacity outside China," Barrios said.

According to him, Rio Tinto, engaged in operations in Canada, has a good opportunity to take advantage of the emerging opportunities in the industry. The company is already working on expanding smelting capacity in Quebec, he noted.






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