Aluminium prices will rise to average above $2,000 per tonne in 2015 while copper prices are expected to fall slightly, a conference was told.
Nic Brown, head of commodities research at Natixis, told delegates a shortage of bauxite, used to produce aluminium, coupled with increased demand would push the average price to $2,070 (£1,281) in 2015 and $2,240 (£1,386) in 2016.
Speaking at the LME Metals Seminar in London, Brown said: “We think aluminium markets will face a warming phase in the years ahead and we expect prices to rise.”
He said Chinese producers were “very dependent” on Indonesian bauxite, of which there is “a lack”, and “next year this will become an issue as smelters become short of bauxite”.
“We think the surge [in aluminium production] we have seen in the past few years is nearly over,” said Brown.
He said demand for aluminium was being driven by automakers, seeking a lighter alternative to steel to improve the fuel efficiency of cars, and he predicted annual growth in demand of around 5 per cent “in coming years”.
Meanwhile, delegates were told the price of copper was expected to average around $6,760 (£4,183) in 2015, compared with $6,900 (£4,270) in 2014.
Vanessa Davidson, group manager at CRU, said there would be a surplus in copper production, though “the huge glut of metal people were expecting in this sector is not going to materialise”, and demand will fall, particularly in Europe.
The conference was told China accounted for around half of global metals consumption and that between 2009 and 2011 the country used as much concrete as the US did in the past 100 years.
Arthur Fan, CEO of BOCI Global Commodities, said a slowdown in China, caused by transition from an investment-based economy to one based on consumption, financial reform and more interaction with international markets would affect commodity markets.
“In the next years we will see quite a significant change in the impact of China on the global metals market,” he said.