Alumina deficit will be 4 million tons in 2016

Australia's Department of Industry, Innovation and Science projects a global alumina shortage of 4 Mt in 2016 and 2017.

Global consumption in 2016 is expected to grow 3 percent year on year to 116 million tonnes, while production is also expected to rise 3 percent to remain at 112 million tonnes, the department said in a report on Friday.

The office expects global alumina consumption to grow by 7 percent in 2017 to reach 125 million tonnes, supported by strong aluminum production in China, Russia and the Middle East.

The report says that global alumina production is projected to increase by 7 percent in 2017 to nearly 121 million tonnes, driven by a restart of facilities in China and the introduction of new products in Jamaica, India, Indonesia, Vietnam and the UAE.

The department expects 2016 alumina prices to average $ 238 per tonne FOB Australia. In 2017, growth on average will lead to a price of $ 250 per tonne, which is associated with the expected increase in production costs.

The cost of Australian alumina in 2015 averaged $ 300.47 per tonne FOB, according to the Department. In the first and second quarters of 2016, Australian alumina prices averaged $ 222 per tonne and $ 252 per tonne, respectively.