In Tables 1 and 2 the supply-demand balance for primary aluminium is analysed. Totals for consumption are taken from Table 3, where consumption is estimated and forecast by assessing the change in consumption of semi-finished aluminium products (rolled products, extrusions, wire rod, castings, etc.) in each country and calculating the impact of this on the consumption of primary aluminium. The levels of production from Table 4 are used and from these is derived a forecast of the implied movement of producers' and terminal market stocks, which are key determinants of short-term prices. The forecasts for the third quarter of 2007 for world consumption, production, identified stock change (IAI producers plus LME) and total identified stocks at the end of the quarter, compared to the estimated actual outturn, were as follows: In our last report (August 2007) we expected the market to remain strong with a tendency for prices to rise in the short term. In the event, consumption continued to be much stronger than expected, while production was also higher because of high output in China. As a result, stocks rose slightly and prices were lower than forecast.
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