UPDATE 1-Aluminum market to return to balance but more cuts needed -Rio Tinto
(Adds market background, additional context)
VANCOUVER, Sept 22 (Reuters) - Global aluminum demand will rise by 24 million tonnes to reach 78 million tonnes a year by 2025, a Rio Tinto executive said at an industry conference on Tuesday, but oversupply will continue to force further capacity closures.
"Demand for our products is clearly healthy," Alfredo Barrios, Rio Tinto's chief executive for aluminum, said at Metal Bulletin's International Aluminum conference in Vancouver. "The issue we face is excessive supply."
The aluminum market should return to balance in the next five years, Barrios added.
China, the world's leading producer and consumer of aluminum, has maintained production at stubbornly high levels even as smelters in other parts of the world close. This has prompted industry complaints that Chinese production decisions are not made with supply-and-demand factors in mind.
However, he added that Chinese supply and demand would be balanced over the medium and long term.
With continued demand growth and further curtailments, Barrios said, the price of aluminum would "revert back toward the marginal cost of production in a few years." (Reporting by Luc Cohen; Editing by Chizu Nomiyama and Lisa Von Ahn)
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