GREY:EORBF - Post by User
Post by
bulgaron Feb 20, 2013 11:16am
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Post# 21016192
Alumina
Alumina
Wednesday February 20, 2013 10:28 AM
Deutsche Bank sees a number of factors that could underpin the price of alumina, which is used in the production of aluminum. "Our long-term (fair-value) estimate for alumina is USD400/t; we expect that the spot price could reach USD375/t in the first half of this year," the bank says. The 2012 average was $318 a metric ton. Alumina rose during the last couple of weeks as the market factored in increased demand and production constraints, but the second factor "faltered modestly" due to news that Rio Tinto will not shut down its Gove alumina refinery as many in the market had expected, says Deutsche Bank. "While we expect that this decision could temper the near-term strength in alumina prices, there are other factors which could result in support for higher prices in the medium/long term and beyond that which could be attributable to cyclical demand," the bank says. Analysts cite exports of Indonesian bauxite that remain well below peak levels from prior to an export ban, new Indian smelters that will require increased bauxite and alumina imports, Chinese smelter expansions, and skepticism about China's ability to source its growing bauxite and alumina requirements domestically, likely having to rely on imports.