Aluminium prices are expected to rise next year as the market, which was in balance this year, hits a patch of shortage, an analyst said on Monday.
"We believe the market is going to move into deficit next year," Adam Rowley, division director for metals and mining research for Macquarie Bank, told a London Metals Exchange seminar.
Aluminium was traded between $1,800 and $1,900 per tonne this year.
"I do believe the price risk is heavily on the upside," Rowley said.
He said deficit may result from an increase in demand and lower supplies.
"I believe production is going to grow by about 4.5 percent next year...If world demand grows by more than 5 percent we'll be in the deficit," he added.
Rowley said rising energy prices had forced closure of smelters in Europe and a large number of other smelters could be included in the "at risk" category".
He said shortage of alumina, an intermediate product for aluminium smelting, was also expected to take place next year.
This would mostly hit China, as Chinese smelters were more exposed to high prices, while producers elsewhere were covered by long-term contracts.