This five-year forecast is based on what will be the most likely series of economic developments over the next several years, none of which anticipates an extreme or severe worldwide business recession similar to 1974–1975. Under the assumptions in the forecast, the long-term outlook for the aluminum industry is: (1) aluminum supply/demand will grow progressively tighter through 1983–1984, and (2) aluminum prices will trend higher at a rate faster than both inflation and production costs for the next several years.Through 1984 the demand for aluminum will be limited by the availability of new supplies of both primary and secondary sources of metal. This limitation will keep the international aluminum prices and the return on capital above the level necessary to justify new investments in basic smelting capacity. Because of the improved industry outlook, many international aluminum companies are seriously gearing up to initiate expansion programs over the next several years. However, due to the capital constraints, the construction time required for greenfield plants and the difficulty in locating economic power sources, major new aluminum capacity expansions through 1985 will be somewhat restricted. Also, unlike past expansion phases in the aluminum industry, there exist today substantial tonnages of in-place capacity which, because of soaring energy costs, have become economically obsolete. In the future these smelters could be dismantled or be mothballed, as has been the case in the Japanese aluminum industry, or quickly closed down during periods of soft demand.
Aluminum Industry Five-Year Forecast—1980–1984
Sae Technical Papers
1980 Automotive Engineering Congress and Exposition ; 1980
1980-02-01
Conference paper
English
Metals , Gears , Aluminum , Production
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