ALUMINIUM CAPACITY GROWTH TREND SEEN INSUFFICIENT Aluminium capacity expansion planned for the period after 1990 will be insufficient to supply any acceleration in demand growth, let alone an increase on the scale which seems likely, according to analyst Anthony Bird Associates' 1987 Aluminium Review. By 1995 non-socialist world primary capacity will need to be around 18 mln tonnes, whereas on current plans only 15 mln tonnes are scheduled, Bird said. Bird forecast higher economic growth after 1990 and increased imports by less developed countries. Aluminium consumption growth is not expected to accelerate by as much as general growth, but non-socialist world consumption is nevertheless forecast to increase sharply from 13.77 mln tonnes in 1990 to 17.25 mln tonnes in 1995, Bird said. Aluminium companies were slow to adjust to the pace of change after 1973, the review said, and now they have completed this transition they may be in danger of remaining preoccupied with the strategies of retrenchment and survival which have served them well in recent years. In order to encourage the construction of additional smelters aluminium prices will need to settle at a higher level. Production costs are likely to rise again in the years ahead as the glut of alumina capacity vanishes and electricity suppliers take a more aggressive line with aluminium companies, according to the review. At March 1987 prices the three most likely cost-price scenarios call for a long-run aluminium price of between 73 and 89.5 cents a lb, depending on exchange rates, Bird said. Such a price development is not expected to cause any marked competitive problems for the metal because of the likely rise in commodity prices as a whole and cost pressures in the pipeline for steel and copper. In the short term, however, the outlook is dull, Bird said, as the world economy has not responded well to the opportunities offered by cheap oil. Its 1987 consumption forecast of 13.01 mln tonnes is 0.4 pct down on 1986, while production is forecast six pct higher in 1987 at 12.67 mln tonnes.