The global aluminium market is forecast to shift to deficit from surplus this year, HSBC said Monday in its Metals Quarterly report for the second quarter of 2014.

"The acceleration of cuts and deferrals in markets outside China has improved the demand-supply balance in 2014-15. We moved from a slight global surplus to a slight deficit in 2014(e), but maintain a balanced market for 2015(e)," the bank said.

HSBC said it had cut its 2014 and 2015 production forecasts for non-Chinese production by around 640,000 mt and 940,000 mt respectively.

The bank expects to see a global deficit of 144,000 mt this year with the market moving back into a 288,000 mt surplus in 2015.

It noted that weak prices since June 2013 had accelerated capacity shutdowns and that while this improved the market balance, it expected to see larger surpluses re-emerging in 2016 and 2017.

"Indian and Russian projects have been delayed due to low prices and other challenges, but they are likely to come through soon. We still expect around 4 million mt of new production over 2014-17e coming from new smelters in Canada, India, Malaysia, the Middle East and Russia," the bank said.

HSBC has lowered its demand growth estimate to 5.5% from 5.7% over the 2013 and 2017 period due to revisions made by the bank's economics team on emerging market growth rates.

But on the back of the forecast deficit the bank sees the potential for prices to move above $2,000/mt at the end of this year.

HSBC is forecasting an average aluminium price of $1,887/mt for the full-year in 2014.

Three-months aluminium on LMEselect was trading at $1,848/mt at 1024 GMT Monday.