Salient to Investors:

Barclays estimates stockpiles will rise for at least the next four quarters, and production will exceed demand by the most since 2009. The median analyst expects futures to rise as much as 16 percent in 2013.

Buyers are waiting a year to get metal. Credit Suisse says as much as 80 percent of stockpiles tracked by the LME are locked into financing deals and unavailable to consumers. Jeremy Baker at Vontobel Commodity Fund said the artificial tightness is created by financing, while fundamentally aluminum is the least attractive metal due to excessive supply. Michael Widmer at Bank of America said the market balances generally don’t matter – what matters is what is happening on the LME so you have to pay up for obtaining the metal.

The median estimate expects aluminum to rise 10 percent in Q4 2013 from Q4 2012.

Gayle Berry at Barclays said demand for aluminum has been stronger than any other base metal over the past decade but supply has grown strongly, and this will continue in 2013 so recommends selling into any rallies.

Hussein Allidina at Morgan Stanley says aluminum has the weakest outlook of 21 commodities because the increase in premiums caused by financing deals is limiting the output cuts needed to curb the glut.

CRU says transportation accounts for 25 percent of aluminum consumption and construction 24 percent. LMC Automotive expects global car sales to rise 2.5 percent in 2013.

The IMF sees global growth of 3.6 percent in 2013 versus 3.3 percent in 2012.

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