Recently, the price of aluminum has been depressed due to a
glut in the market. However, it is expected to rebound thanks to a pick-up in demand,
according to Vladislav Soloviev, chief executive of Rusal, one of the world's biggest
producers.
The metal would
finish the year at around $2,000 a ton, "not far off" flat for the year, he told CNBC at
St Petersburg Economic Forum in Russia, adding that he hopes that the trend for the dollar to strengthen will change.
The strong greenback, the currency used to price aluminum and other commodities, has pressured many commodity prices lower this year.
Aluminum has averaged over $2,000 a ton since 2010. Deutsche Bank analysts predicted average prices to settle at $1,780 a ton in the
second quarter of 2015, rising to $1,950 in the last quarter this year.
As it costs around $1,730 per tonne to produce aluminium, according to industry analysis firm Harbor Aluminium, producers' profits will likely drop.
Soloviev commented that on the one hand, there is a strong demand of 6.5 percent yearly, and on the other, the situation with Chinese exports is unclear.
Not so long ago, China has approved quality standards for the use of low-voltage aluminum alloy-cables, suggesting that these may replace more expensive (and less available in China) copper in future electrical grid work.
Goldman Sachs's commodity analysts said that the move can be seen as part of China's desire to obtain 'metal independence'.
It has also scrapped a 15 percent export tax on the metal in order to encourage producers to sell overseas.
Meanwhile, Soloviev said that China will definitely grow predicting that Chinese exports will be around 4.5 million metric tons, not the 5 million metric tons some are forecasting.
Besides, Russian demand will not fall this year, as many expected.
