Morgan Stanley expects China's aluminium price to drop four percent this year, Wednesday's China Securities Journal reports.

The newspaper, citing a survey by Morgan Stanley, said the global market will face about 378,000 tons of oversupply of aluminium this year, a sharp contrast to last year's aluminium shortage.

Morgan Stanley said that the aluminium price is now at its highest and the producers should pay close attention to its production costs.

Sources from China's largest aluminium producer, China Aluminium Co., Ltd, said China is still in great need of aluminium this year to maintain rapid national economic growth, but the soaring cost of production and stiff market competition adds to the great pressure on the company.

The company's aluminium output in 2005 realized a growth of 13.2 percent from the previous year to 7.18 million tons, with an average price of 3,824 yuan (about 480 U.S. dollars) per ton, up 1.2 percent over the previous year, said China Aluminium.

Source: Xinhua