It believes aluminium prices will be between $2400-2500/t while China will become a importer of aluminium in 2011.
It said that based oncontinuing demand for aluminium from China and the recovery of physical demand in the USA, Europe and Japan, global demand for aluminium is expected to rise by around 8% from 2010 levels.
Growth in aluminium demand in regions other than China is expected to be strong, indicating that Western markets appear to have rebounded positively from the financial crisis.
China has continued to experience significant year-on-year growth in floor space under construction and there is a strong outlook based on continuing trends in urbanisation.
As a result aluminium consumption in China in 2011 is forecast to grow by 12% and reach 18.5Mt. Rusal believes China will increase its imports of primary to 3-4Mt by 2015.
It is estimated that more than 20% of China’s domestic aluminium producers are unprofitable at the current aluminium price due to the increase in domestic electricity tariffs, higher raw material costs and wage inflation.
Curtailment expectations have been further fuelled by Chinese government restrictions on outdated facilities and a strengthening currency. Rusal anticipates this will lead to a reduction in production of up to 2Mt in 2010 and further cuts in 2011.
The company expects strong rebound in US consumption in 2011 based on a fast recovery from the financial crisis and the government fiscal stimulus.
More strong growth is expected in the automotive, transport and packaging industries and moderate rebound is expected in construction activities. 2011 aluminium consumption in the US is expected to grow by 4.5% to 5.4Mt.
Rusal expects its Russian and CIS market sales to grow by about 22% to 928kt in 2011, mainly driven by a strong rebound in the machinery, construction and packaging industries.
Looking further ahead, infrastructure spending for the construction of roads, buildings and transportation facilities is expected to support further aluminium growth in the medium to longer term together with large-scale projects such as the 2014 Winter Olympic Games and the hosting of the 2018 Football World Cup recently awarded to Russia.
The company expects Russia’s cumulative annual compound growth rate for aluminium consumption between 2011 and 2015 to be 8%.