International
status
The growth in primary
aluminum production slowed down in 1998 as against the preceding
year. Aluminum production in 1998 increased by 4.5% to 19.5mn tons.
As against this increase growth in production during 1998 was only
2.4% at 19.9mn ton
Aluminum
Capacity
|
Country
|
Million
ton
|
Percent
|
|
Europe
|
6.65
|
33.4
|
|
North
America
|
6.44
|
32.3
|
|
Latin
America
|
2.10
|
10.6
|
|
Asia
|
1.80
|
9.0
|
|
Australia/NZ
|
1.74
|
8.8
|
|
Africa
|
1.17
|
5.9
|
|
Total
|
19.92
|
100.0
|
Aluminum production in
1998 was down by 5.7% in Africa and by 3.5% in Asia. North America
as well as West Europe witnessed an increase of 2.6% and 7.6%
respectively. Around 48.3% of the total aluminum production of
19.9mn ton was produced by these two regions.
|
Country
|
Consumption
(%)
|
Production
(%)
|
|
Europe
|
30.8
|
21.9
|
|
USA
|
29.0
|
22.9
|
|
Canada
|
3.4
|
14.4
|
|
Latin
America
|
5.1
|
13.2
|
|
Japan
|
13.3
|
0.2
|
|
Rest of the
world
|
19.4
|
27.4
|
Even though the
aluminum output increased by a paltry 2.4% in 1998 weak demand for
the metal pushed prices to record lows. Aluminum prices sank to
$1,170/ton in February 1998 from $1,500/ ton in the same period of
the previous year.
The ongoing crisis in
the South East Asian countries has resulted in de-stocking of
aluminum by these countries. South Korean companies like Hyundai,
Kia and Daewoo are clearing their aluminum stocks or are exporting
the same in a bid to reduce their inventory levels in anticipation
of a sluggish demand.
The economic crisis in
Japan has further aggravated this problem. Japan is one of the
major consumers of aluminum in the world accounting for 13.3 % of
the world aluminum consumption. The country is a net importer of
metal with its production being a meager 0.2 % of world production.
Hence, in the short run the outlook for the metal in the
international markets seems bleak with Japan facing an economic
crisis.
Steady increase in
production and exports from the CIS nations are expected to further
put pressure on the prices. This is due to the fact that the demand
for aluminum from the CIS nations is expected to reduce given the
state of their economies.
Another factor that
could further create a glut in the aluminum market is the
reactivation of smelter capacities from the Western countries.
During 1994 producers in the US, Canada, EU, Norway, and Russia
signed a memorandum under the aluminum industry pact to cut
aluminum production to the tune of 1.5 million ton. This was done
in response to an over supply of aluminum in the domestic market.
This is expected to add another 0.55mn ton of aluminum to the
current supply.
