Aluminum demand will rise

The signs are out there. Aluminum demand is going to soar. This is why aluminum price remains high even though there is a large contango in this metal.
The LME stock is currently at record highs of 4.6mln as futures investors are eyeing the expected increase in Aluminum prices years ahead.

Global demand in 2009 was at about 32mln, and this year it is expected to rise to 36mln tons. There is no need to worry about the high stock level at the LME warehouse as the demand is just too high.

China’s demand was 14mln tons last year. Far higher than the estimates of 10mln tons that analyst predicted 5 years ago.
"BEIJING - China's demand for aluminum products will reach 6.78 million tons in 2005, and continue to rise to 7.66 million tons in 2006, Vice-Chairman and Secretary General of China Nonferrous Metals Industry Association Pan Jiazhu noted at a recent international aluminum conference in the US.
Over the long term, demand will hit 8.43 million tons, 10 million tons and 14.3 million tons by the year 2007, 2009 and 2020 respectively, predicted Pan, adding that the growth rate of"

China’s demand is already in excess of 14mln tons which was the demand predicted for 2020! We are 10 years earlier.

Chalco, China’s largest aluminum miner said that China’s demand is expected to grow by 23% this year. They are expecting demand to be 17.5mln tons.

However, do note the supply capacity that China has. It is currently at 17.5mln tons, and she is increasing it to 19.5mln tons by this year, and to 21.5mln tons by 2012. If demand continue rising, China may be in a shortage. Furthermore, the country is now limiting new licenses for smelters due to concerns of power outages in the cities.
Europe is going to shut down more than half of their supply capacity of Aluminum as the power bills are getting to high. They would be importers of Aluminum soon.
As power and energy becomes a major concern, aluminum metal is in high demand for anything that moves. Trains, aeroplanes, cars, trucks, ships and aerospace requires lots and lots of aluminum.
This is one metal that will experience a price surge in the near future as energy becomes more expensive. This is why I think the stock levels in LME will grow even higher and higher. Soon, Goldman Sachs may be setting up an ETF fund to purchase physical aluminum for storage, selling it in the future at perhaps $2/pound.
Global demand of Aluminum is expected to soar to 50mln by 2015 and to 70mln tons by 2020!

The signs are everywhere out there on the internet.

Jan 29: Alcan Ceo says aluminum demand will recover in the next three years.
http://www.sourcejuice.com/1299294/2010/01/25/Alcan-CEO-aluminum-demand-recover-next-years/

Feb 1: Chalco Expects 23% China Aluminum Demand Gain, Citigroup Says
http://www.chinamining.org/Companies/2010-02-01/1265005198d33923.html

Feb 8: DJ Alumina CEO Says 2010 Aluminum Demand Expected 10% Above 2009
http://www.tradingmarkets.com/news/stock-alert/awc_dj-alumina-ceo-says-2010-aluminum-demand-expected-10-above-2009-762130.html

Feb 19: Aluminum demand in Asia may rise
http://www.bloombergutv.com/industry-news/other-industry-news/45234/aluminum-demand-in-asia-may-rise.html

Thus, Aluminum stocks will be the best pick of the year.

2015 target for these aluminum stocks

Alcoa Inc AA $60
Century Aluminum Company CENX $85
Aluminum Corp. of China Limited (ADR) ACH $150
Kaiser Aluminum Corp. KALU $100

Consider one portfolio of Aluminum stocks diversified.
The following price targets are based on these assumptions.

BY 2015,
- Aluminum global demand rises to 50mln tons
- Aluminum priced at $1.5/pound at LME
- No financial meltdown

Which banks are bullish on Aluminum?
- Barclays, Deustche, Goldman Sachs, Credit Suisse, Citi,
JPMorgan
Which banks are bearish on Aluminum?
- HSBC.

Start loading up on Aluminum stocks today at these cheap prices. And ride it through the next 5 years. China is going to experience yet another booming year and it will keep happening especially as it braces itself for the year of the water dragon in 2012.