Alcoa Primed for Aluminum Surge

China, which is both the world's largest producer and consumer of aluminum, is poised to lead the global consumption recovery.

Aluminum production in China is likely to increase by 9% during 2010 to 14.5 million metric tons. China produced 13 million metric tons during 2009, helped by the spurt during the second half of the year, despite a weak first half.

Both autos and aviation, the industries with the most aluminum demand, are set to register strong growth in China during 2010.

According to data released by the China Association of Automobile Manufacturers, car sales in January 2010 jumped 116% over the same month last year. Analysts expect annual auto sales in China to grow by 10% during 2010, which will help drive demand for the metal. Moreover, domestic air travel in China is estimated to grow at a similar pace.

Chinese aviation is bullish again growing capacity aggressively, taking delivery of almost one in two aircraft bound for Asia Pacific airlines in 2009 - a proportion it will repeat in 2010 and 2011, according to a report by Sydney-based Centre for Asia Pacific Aviation.

According to market research firm RNCOS, in the short-term, China is expected to see aluminum price behaving positively to every continuing sign of revival in the economy. This is also well-supported by the immediate unavailability of the metal.

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