The Hindu Business Line : Aluminium seen ruling strong

ALUMINIUM prices are seen ruling strong well until the first half of 2005, copper prices are likely firm, while zinc prices are projected to rise 26 per cent this year, according to the Australian Bureau of Agriculture and Resource Economics (Abare).

Aluminium prices are forecast to range at around $1,633 a tonne this year, but then average at about $1,610 the next year with the rates seen falling during the second half.

Copper is expected to average $2,473 a tonne this year and dip a tad next year to $2,430. Zinc could average $1,060 a tonne this year and then, rise eight per cent further next year to $1,150.

All the three metals are projected to rise on consumption by China and the US. Except aluminium, the other two metals will vault higher on lower stocks also.

While industrial growth in China is expected to drive copper imports, the manufacturing and construction sectors are seen as catalyst for copper consumption in the US.

China's aluminium consumption is expected to rise 14 per cent this year and seven per cent next year driven by industrial production. In fact, its demand for aluminium is projected to outpace the US requirements. US' demand could rise six per cent this year and two per cent next year.

Zinc consumption in China and other Asian countries is expected to continue with the upward trend, while US industrial production and western Europe are also expected to consume a higher amount of the metal.

Production expansion of copper in Chile and the US are expected to rein in the prices after 2005, while aluminium output could rise four per cent both this year and next to touch 30 mt.

Refined zinc output, on the other hand, is seen down one per cent this year but could rise two per cent next year to 10.1 mt.

Stocks are expected to decline sharply to 765,000 tonnes this year before rising to 802,000 tonnes next year.

Copper stocks, too, are seen behaving the same way to slip to 741,00 tonnes before rising to 811,000 tonnes.

Aluminium stocks are seen up this year at 3.27 mt (3.14 mt) and then to 3.40 mt. It is because of the higher stocks that the gains in aluminium have been limited as compared to other metals.