A day after Alcoa Inc., the world's largest aluminium producer, predicted continued strong demand for the metal this year amid tight supply, analysts took a second look at their own forecasts – and wondered if they looked too light.

Among several brokerages that cover Alcoa's shares, 2007 price forecasts for aluminium range from 95 cents a pound to $1.35, indicating analysts predict anywhere from a roughly 17% drop to a 20% gain from last year's average price.

"Our full-year aluminium price forecasts could be conservative," said Bear Stearns analyst Anthony Rizzuto on Wednesday. He said the metal may face some challenges this quarter as commodities index funds rebalance.

Still, "the current aluminium spot price ... offers a relative attractiveness versus other metals," he wrote in a research note. He forecasts aluminium prices of $1 a pound this year, as tracked by the London Metal Exchange.

Other producers likely to benefit from higher aluminium prices include Canada's Alcan Inc. and smaller producer Century Aluminium Co.

A lot depends on China.

The country, which has been driving global demand for aluminium, has also been building up its production facilities. Last year, it restarted several plants turning out alumina, the granular raw material used to make aluminium, and ramped up aluminium output.

After that steep increase, China's production growth could cool this year.

BMO Capital Markets' Victor Lazarovici estimates the world could see a deficit in the supply of aluminium of about 300,000 to 600,000 metric tons, supporting average yearly prices of about $1.35, he said.

"The increase in aluminium production last year in China will continue but the rate of growth in production will slow sharply," he said.

Meanwhile, Prudential Equity's John Tumazos said aluminium prices could top his $1.20 a pound forecast for this year, even reaching as far as $3 a pound, should Chinese aluminium production fall short.

"It is possible that the Chinese cannot maintain current output or achieve ... recent output growth," he told investors.

In a call Tuesday evening, Alcoa's executives forecast double-digit demand from China. The company has previously forecast Chinese production growth will level off at about 17% this year.

"I think the market will continue to be tight," said Chief Executive Alain Belda but, when asked, declined to predict where aluminium prices are going.