NEW YORK (Commodity Online): The world’s biggest producer of aluminium-RUSAL, is expecting demand to slow down in 2012. The company expects global demand to grow by only 7% this year compared to a 10% growth last year.

“2012 is forecast to be a very challenging year for Europe”, the company said in a statement to the Hong Kong stock exchange. With regard to Chinese demand, the company expects a 11% growth this year. However, “about 31 percent of China’s aluminum production capacity may be unprofitable now”, it added. RUSAL may also cut down its production by 6% within the next 18 months on the back of weak global demand.

LME aluminium prices have basically remained weak for the pat years, trading below $3000/tonne, on the back of a surplus production since 2005. A recent Barclays report suggested that this could come to an end in 2014 when the aluminium market is expected to experience a shortage. With manufacturers increasingly preferring aluminium over copper and producers cutting back on production, we might well see a shortage by 2014.