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Novelis says global aluminum demand to grow 4-5 percent in 2017
October 11, 2016 / 10:32 AM / a year ago

Novelis says global aluminum demand to grow 4-5 percent in 2017

SEOUL (Reuters) - Novelis Inc [NVLX.UL], the world’s largest maker of rolled aluminum products, sees demand for the metal growing 4-5 percent in 2017, boosted by sales to carmakers and can manufacturers, company executives said on Tuesday.

Aluminium coils are seen at Noveli aluminium factory in Pindamonhangaba, Brazil, June 19, 2015. REUTERS/Paulo Whitaker

“Globally we see somewhere around 4-5 percent of downstream rolled aluminum growth,” Novelis Chief Executive Steve Fisher told Reuters in Seoul.

“That varies region to region, product to product, but that’s kind of an overall growth rate that we see for aluminum through 2017,” Fisher said.

In Asia, aluminum demand for both automobiles and cans is expected to grow faster than the rest of the world due to population growth and increasing environmental awareness.

“Cans could grow 5 to 6 percent in Asia, South East Asia will be 7 to 8 percent, but automotive 20 to 25 percent,” said Sachin Satpute, President of Novelis Asia.

“I can tell you if electric vehicles come ... it will be exponential,” Satpute said.U.S.-based Novelis supplies aluminum to automakers such as Jaguar Land Rover [TAMOJL.UL] and to drinks makers like Coca-Cola (KO.N).

Global aluminum makers have been boosting their capacity to meet rising demand from automakers looking for lighter alloys to replace high-strength steel and to use in electric vehicles.

“(For electric vehicles) the critical element is miles or kilometer per charge,” said Satpute, adding that lighter weight components are crucial to making power charges last longer.

“For that aluminum is a perfect solution,” he said.

Fisher said he expected competition with Chinese producers to be “very fierce” over the next five to 10 years in high-value-added aluminum sectors such as aerospace and automotive, which have so far been dominated by European and U.S. aluminum manufacturers.

    “Certainly (Chinese aluminum makers) will be able to produce high quality products as well,” he said.

    At end-August, in the midst of a trade dispute, Zhongwang USA LLC said it would buy U.S. aluminum company Aleris Corp (ALSD.PK), marking the biggest entry by a Chinese company into the U.S. aluminum industry.

    Asked about premiums on primary aluminum for next year, the Novelis chief said they should remain near current levels.

    “We don’t see what would drive them to move up significantly again as we saw a few years back,” he said.

    Fourth-quarter premiums in Japan were set at $75 a tonne, down 17-19 percent from the previous quarter and touching a seven-year low amid a supply glut.

    (This version of the story refiles to correct the spelling of Novelis Asia head’s name)

    Reporting by Jane Chung; Editing by Tom Hogue

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