Mining News Pro - Aluminum producers will need to build additional smelting capacity outside of China as inventories run down in the coming two to three years, according to Rio Tinto Group.

According to Mining News Pro -We see aluminum demand growth being extremely healthy,” Alf Barrios, Rio’s aluminum CEO, said in an interview. “People believed China was going to be a significant net exporter to the rest of the world in the future, I think people now see China being more balanced.”

Holdings of primary aluminum tracked by the London Metal Exchange fell for a second quarter in the period to September and shrunk last month to the lowest level since 2007.

Bloomberg Intelligence has a positive medium-to-long view on aluminum based on global deficits persisting over the next three years, while Goldman Sachs Group judges that the market is too relaxed about supply risks.

The industry will start seeing inventories coming down to historical levels in the next couple of years, Barrios said. “You still have spare capacity in China, which will have to be absorbed by demand growth.”

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