Asian aluminum demand to slow after currency crises: Analyst

Asian aluminum demand to slow after currency crises: Analyst

RIO DE JANEIRO (Reuter): Recent currency devaluations in key Asian economies should help cause a slowdown in regional aluminum consumption through 1998 but demand is still unlikely to fall, industry analyst Adam Rowley said.

The sharp depreciations, particularly in the Thai baht and Indonesian rupiah, had led to a reduction in aluminum demand

But the main driving forces behind strong growth in the region -- high investment and the shift from a rural to an industrial economy -- remained in place, he told

Rowley said Asia, including China, would account for just over one quarter of total world aluminum demand by 2001, representing an increase of more than two million tons from 1996 levels.

The forecast allowed for two years of relatively slow growth in 1997 and 1998, he said.

Even with a short-term weakness in demand, Asian growth rates in aluminum demand were expected to be well above those in main consuming regions.

Asia aluminum demand to Indonesian rupiah, had led to a reduction in aluminum demand as import costs jumped and consumers postponed orders.

"In the short-term...there will be a negative impact on demand," said Rowley, London metals analyst at Macquarie Bank Group, Australia's largest independent investment bank.

But the main driving forces behind strong growth in the region -- high investment and the shift from a rural to an industrial economy -- remained in place, he told delegates at a conference organized by Metal Bulletin.

"Consequently, I believe that even with policy changes these countries can still support demand growth rates of well over 10 percent per year after 1998," he said.

Rowley said Asia, including China, would account for just over one quarter of total world aluminum demand by 2001, representing an increase of more than two million tons from 1996 levels.