LONDON (Commodity Online): On the demand side, the most recent numbers have been uninspiring for Aluminium, said Barclays in a report. In Europe, Japan and the US, data displayed sequential weakness in shipment levels into year-end, although an up -tick in regional premia in January, alongside some positive auto data in the US at least, may be suggestive of some improvement.

In terms of China, weakness in local premia, a firmly shut import arbitrage window and rising stocks point to a surplus dynamic coming into play.

Aluminium prices have spent the past month meandering around the $2,100/t level, displaying little sign of direction. Whilst macro sentiment has so far remained relatively buoyant in 2013, the general quality of fundamental data has done little to suggest that a tighter market balance is developing. With close to a complete dataset, Barclays’ 1.5Mt 2012 surplus is now the largest they have projected for the year.

The IAI production data showed global primary output rising to a record high in December of 136Ktd, up close to 6% y/y. Recoveries from disruption at two key western world smelters (the 430Kty Alma and the 715Kty Hillside), alongside record Chinese output, were the key contributions.

The most recent anecdotal evidence suggests that capacity ramp-ups in Xinjiang province are on track with captive power sources established at key facilities, pointing to support for our robust supply growth expectations.