Barclays estimates that aluminum stocks will continue to grow at least in the next four quarters and will reach a record 8.67 million tons by the end of 2013. The bank stated that with the expansion of production from China to Saudi Arabia and other countries, the level of production exceeding demand will be the highest since 2009. The median estimate of 29 analysts surveyed by Bloomberg shows that the price of aluminum ** will rise by 16% to reach $2,400 per tonne next year.
Analysts are predicting price increases because aluminum is not always available at any time. From warehouses in Detroit and Vlissingen, where most of the worldâ€™s aluminum stocks are stored, to the actual arrival, buyers often have to wait approximately one year. Credit Suisse estimates that as much as 80% of aluminum stocks tracked by the London Metal Exchange (LME) are locked in trades, and consumers simply cannot get it. Platts, a subsidiary of McGraw-Hill Companies, believes that this means that some customers must pay high premiums to get supplies.
"I think the tight market situation is man-made and it's caused by the trade," said Jeremy Baker, who manages about $850 million in assets in the Vontobel Belvista Commodity Fund. "If purely from a fundamental point of view, aluminum is probably one of the least attractive metals, and the main reason is its excess supply."
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