Norsk Hydro has raised its annual global aluminum demand growth forecast to 4-5% for 2016, up from the previous forecast of 3-4%, the Norwegian producer said Thursday.
"Higher-than-expected activity in China means that we now see primary aluminium demand in China alone to grow by 5-7% in 2016. Globally, we expect a largely balanced aluminium market for the full year," Hydro's president and CEO, Svein Richard Brandtzaeg, said in the company's second-quarter results statement.
Global primary aluminum consumption in the second quarter rose 13% from Q1 to 15.4 million mt, and was up 5.2% year on year, according to Hydro.
Compared with the first quarter of 2016, Chinese aluminum consumption in Q2 increased by 22.7% to 8.2 million mt, due to seasonal effects, the company said in its Q2 report, adding that the year-on-year increase from the second quarter of 2015 was 7.7%.
"Corresponding aluminium production increased by 4.7% compared to the first quarter of 2016, and increased 1.1% compared to the second quarter of 2015," Hydro said.
The ramp-up of new capacity continues in the Northwest regions, Shandong and Inner Mongolia. Some capacity curtailed in the fourth quarter of 2015 is being restarted, although at a slower pace than anticipated, the company said.
Outside China, Q2 demand rose 3.8% from the first quarter, and 2.6% year on year, with quarterly consumption amounting to 7.19 million mt, the company said.
Corresponding production amounted to 6.66 million mt, in line with Q1 levels.
"Production outside China experienced a 2.1% increase compared to the second quarter of 2015, largely driven by ramp-up of new production capacity in India, Canada and Malaysia. This was partly offset by curtailments implemented in the US during the first quarter," Hydro said, adding that demand for primary aluminum outside China is expected to grow by around 2-4% in 2016.
Hydro produced 518,000 mt of primary aluminum in Q2, up 1% from 514,000 mt in the previous quarter and up 2% from 509,000 mt in Q1; half-year 2016 output was 1.032 million mt, up from 1.005 million mt in the first six months of last year.
