CRU forecasts world aluminium primary demand to rise by 40% to 80.3Mt in 2025.The transport sector will represent the largest share of demand growth. It will be driven by light weighting of vehicles in the USA and Europe due to more stringent emission targets, and higher vehicle production in emerging markets.

Executive summary i

A bright future i

The future is bright for aluminium ii

The transport sector will drive aluminium demand growth iii

Lack of new projects outside China vii

China will dominate supply growth viii

Chinese exports of semis and finished goods will rise sharply ix

Risks increase that China could fill global smelting capacity needs xi

LRMC will rise on higher power and alumina costs xii

Risks to outlook xv

Chapter 1 1-1

Demand for aluminium semi-finished products 1-1

      1. Overview 1-1

      2. Global semis demand to 2024 1-2

      2.1 Semis demand by overview 1-2

Chapter 2 2-1

Prospects for primary aluminium demand 2-1

      1. Overview 2-1

      2. Developing a long term primary consumption forecast to 2040 2-3

      2.1 Regional definitions 2-3

      2.2 Methodology 2-3

      2.3 Primary demand in the short and medium term 2-5

      2.4 Primary demand in the long term 2-7

      Regional analysis 2-9

      2.4.1 China 2-9

      2.4.2 India 2-10

      2.4.3 Southeast Asia 2-11

      2.4.4 Japan, Korea, Taiwan and Hong Kong 2-12

      2.4.5 Middle East and Turkey 2-14

      2.4.6 USA and Canada 2-15

      2.4.7 Europe 2-16

      2.4.8 Brazil 2-17

      2.4.9 Australasia 2-18

      2.5 Analysis of patterns in non-ferrous metal demand 2-20

      2.6 Alternative demand scenarios 2-22

      3. Total metal requirement 2-23

      3.1 Old scrap 2-25

      3.2 New scrap from fabricators 2-26

      3.3 New scrap from semi-fabricators 2-27

      3.4 Product lifetimes 2-28

      3.5 Recovery rates and use of scrap 2-29

      3.6 Scrap trade 2-31

      3.6.1 USA 2-32

      3.6.2 Western Europe 2-33

      3.6.3 Japan 2-34

      3.6.4 China 2-35

Chapter 3

The outlook for production, project costs and energy 3-1

      1. Overview 3-1

      2. Production and capacity outlook, 2014-2024 3-3

      3.1 World ex. China 3-4

      2.2 China 3-13

      2.2.1 North western provinces to drive capacity growth in China 3-15

      2.2.2 Capacity to migrate west on environmental pressures 3-18

      2.2.3 Renewable energy sources in Chinese aluminium industry 3-20

      2.2.4 Power reform, a game changer in the long term? 3-21

      2.2.5 Major Chinese aluminium producers 3-22

      3. Calculating the need for new capacity 2024-2040 3-24

      3.1 Global energy market outlook 3-24

      4. Competitiveness of new projects, 3-30

      4.1 The future of primary aluminium smelting 3-31

      4.2 Cost outlook for new smelting capacity 3-34

      4.2.1 Operating costs 3-34

      4.2.2 Power tariffs 3-36

      4.2.3 Capital costs 3-40

      4.2.4 Economic costs 3-42

      4.3 Financial metrics: NPV, IRR, Target Metal Price and the Radar Benchmark 3-44

Chapter 4 4-1

Long-term price outlook and smelter capacity requirement 4-1

      1. Overview 4-1

      2. Supply/demand balance, stocks and net requirement for new capacity 4-3

      2.1 World market balance and stocks outlook, 2014-2024 4-3

      2.2 Global inventories 4-4

      2.3 Market balance by region, 2014-2024 4-5

      2.4 World requirement for smelting capacity, 2023-2040 4-7

      3. Historical prices and costs trend 4-9

      3.1 Historical LME price trend 4-9

      3.2 Smelting operating costs, 1990-2014 4-11

      4. Premiums 4-12

      4.1 Historical premiums trend and financing activity 4-12

      4.2 Factors affecting ingot premiums 4-13

      4.2.1 LME warehouse rules, cancelled warrants and queues 4-13

      4.2.2 Rival contracts 4-14

      4.2.3 Contango financing 4-15

      4.2.4 Chinese exports 4-15

      4.3 Ingot premiums outlook, 2014-2019 4-16

      5. Long Run Marginal Cost 4-17

      5.1 Terminology of Long Run Marginal Cost (LRMC) 4-17

      5.2 Choice of regions for LRMC 4-18

      5.3 Long Run Marginal Cost (LRMC) base year, 2013$ 4-20

      5.4 Cost inflation index 4-23

      5.5 Cost inflator forecasts 4-24

      5.6 Short Run Marginal Cost (SRMC) 4-26

      6. LME 3-month price outlook 4-27

      6.1 LME 3-month price forecasts, 2014-2040 4-27

      7. Scenario analysis 4-30

      7.1 Upside and downside long run price scenarios 4-30

      8. Future technology developments 4-31

Appendix A A-1

Industrial and economic outlook, 2014-2019 A-1

Appendix B B-1

Glossary of consumption data definitions B-1

Appendix C C-1

Apparent consumption of semi-finished aluminium C-1

Appendix D D-1

Forecasts of primary aluminium consumption, 2013-2024 D-1

Appendix E E-1

Estimates and forecast of capacity and production by major producers, 2014-2024 E-1

Appendix F F-1

Industry news of changes to world capacity F-1

Appendix G G-1

Estimates and forecasts of world smelting capacity, 2000-2024 G-1

Appendix H H-1

Estimates and forecasts of changes in world production, 2000-2024 H-1

Appendix I I-1

Ownership of world smelting capacity I-1

Statistical review S-1

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