Overproduction has resulted in a couple of years of surpluses, but some analysts believe strong demand will pull the market into deficit during 2000.
According to HSBC, this ongoing strengthening of fundamentals could well attract renewed speculative buying. “Aluminium is the funds’ preferred metal play,” the stockbroker said.
Interest in aluminium has also been boosted by merger activity in Europe and North America, though neither the planned Alcoa/Reynolds Metals nor the Alcan Aluminium/Pechiney/Alusuisse-Lonza Group marriages are likely to culminate in any significant production cutbacks.
HSBC predicts an average price of US74c/lb in the year 2000.
