Large shifts in energy and foreign exchange markets have lowered regional smelter Business Costs by up to 25%. Fuel oil and diesel costs only constitute a small portion of operating costs, but declining coal and gas prices are important. US dollar appreciation has been a major driver in lowering smelter Business Costs and forcing the LME price lower.

Executive summary i

Chapter 1 1-1

Primary aluminium demand 1-1

1. Chinese construction demand growth to decelerate 1-1

2. Regional demand 1-8

      2.1 Asia 1-8

      2.1.1 China 1-8

      2.1.2 Japan 1-14

      2.1.3 South Korea 1-16

      2.1.4 India 1-18

      2.1.5 South East Asia 1-19

      2.1.6 Middle East 1-21

      2.2 Australasia 1-22

      2.3 North America 1-23

      2.4 Central and South America 1-27

      2.5 Europe 1-29

      2.5.1 Western Europe 1-29

      2.5.2 Eastern Europe 1-32

      2.6 Africa 1-34

Chapter 2 2-1

The outlook for production 2-1

1. Overview: Chinese producers increase pace of output from projects 2-1

2. Changes to production 2-3

      2.1 Closures, disruptions and re-starts 2-3

      2.2 Idle capacity 2-6

      2.3 Disruptions and restarts 2-8

3. The outlook for world production 2-9

      3.1 World production and capacity, 2013-2019 2-9

      3.2 Regional developments in production 2-10

      3.2.1 North America 2-10

      3.2.2 Europe 2-12

      3.2.2.1 Western Europe 2-12

      3.2.2.2 Eastern Europe and Russia 2-14

      3.2.3 Asia 2-16

      3.2.3.1 China 2-16

      3.2.3.2 Middle East

      3.2.3.3 India and other Asia 2-27

      3.2.4 Africa 2-29

      3.2.5 Australasia 2-39

      3.2.6 Central and South America 2-30 3.3 Changes in ownership 2-32

4. Raw materials 2-33

Chapter 3 3-1

The supply/demand balance and price outlook 3-1

1. Overview: Collapse in oil price dents aluminium 3-1

2. Price and competitive material trends 3-5

3. Supply/demand balance outlook, 2013-2019 3-12

4. Actual and forecast stock changes, 2011-2019 3-14

5. Price outlook, 2014-2019 3-17

      5.1 LME price outlook 3-17

      5.2 Shanghai Futures Exchange (SHFE) cash price outlook 3-22

6. Alternative price scenarios 3-24

Chapter 4 4-1

Regional ingot premiums outlook 4-1

1. Overview: Premiums soften in Asia but remain strong in the USA 4-1

2. Premium and merchant price forecasts 4-2

      2.1 Premiums and merchant prices outlook 4-2

      2.1.1 LME warehouse queues 4-7

      2.1.2 Forward spreads and contango financing 4-9

      2.1.3 Senate hearings 4-10

      2.1.4 LME premium contracts 4-12

      2.1.5 CME contracts 4-13

3. Risks and sensitivities 4-14

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

Forecast semi-finished aluminium consumption, 2010-2019 C-1

Appendix D D-1

Forecasts of primary aluminium consumption, 2010-2019 D-1

Appendix E E-1

Estimates and forecasts of capacity and production by

major producers, 2013-2019 E-1

Appendix F F-1

Industry news of changes to world capacity F-1

Appendix G G-1

World smelting capacity, 1999-2019 G-1

Appendix H H-1

Estimates and forecasts of changes to world production,

1999-2019 H-1

Appendix I I-1

Ownership of world smelting capacity I-1

Statistical review S-1

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