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Aluminium/Bauxite

Canada, U.S. in talks to end steel, aluminum tariffs – by Adrian Morrow and Eric Atkins (Globe and Mail – October 19, 2018)

https://www.theglobeandmail.com/

Canada and the United States are trying to negotiate an end to U.S. President Donald Trump’s tariffs on steel and aluminum, with the goal of reaching a deal before the formal signing of the proposed United States-Mexico-Canada Agreement at the end of November.

Talks have focused on Canada agreeing to a quota on exports of those metals to the United States in exchange for the Trump administration lifting the tariffs, people in both countries with knowledge of the talks said. The Globe and Mail granted anonymity to five sources because they were not authorized to speak publicly on the matter.

Foreign Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer discussed the matter last week at Ms. Freeland’s Toronto home, a Canadian government source said, and agreed they had to reach a resolution.

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Commentary: Alumina wake-up call for the aluminium supply chain – by Andy Home (Reuters U.K. – October 15, 2018)

https://uk.reuters.com/

LONDON (Reuters) – The alumina market is experiencing a year of unprecedented turbulence. Alumina, which sits in the aluminium production process between bauxite and refined metal, has historically been a highly efficient link in the supply chain.

It hasn’t generated many headlines over the years because it has largely avoided any newsworthy disruption. It is, to quote Greg Wittbecker, analyst at the CRU research house, one of those markets “people have taken for granted”.

Not any more. A series of supply hits have sent the alumina price on a rollercoaster ride this year, at one stage threatening the closure of several European aluminium smelters. This volatility poses some hard questions for aluminium producers, not least as to how alumina is priced.

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The Metal That Started Trump’s Trade War – by Matthew Philips and Joe Deaux (Bloomberg News – October 1, 2018)

https://www.bloomberg.com/

The president’s aluminum tariff is bad for America—and great for Switzerland’s Glencore.

Working at the Century Aluminum Co. smelter in Hawesville, Ky., can be like having a job in an oven. The interior temperature hovers around 140F, which isn’t necessarily hotter than, say, your typical steel mill. What’s especially hellish about an aluminum smelter is how close you have to stand to bubbling vats of molten, electrified metal.

Workers wear helmets, masks, and heavy, fire-retardant clothing. They look like smoke jumpers. Over a 12-hour shift they’ll lose several pounds of water weight as they peer over cauldrons, occasionally stirring 1,700-degree liquid aluminum with long metal rods.

They wear earplugs against the hum of 170,000 amps surging through the mixture, which chemically breaks down ore. The air itself feels charged—and smells like the blended aromas of an overheated car engine and a sweaty fistful of coins. If you breathe through your mouth, you can taste the metal on your tongue.

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LMEWEEK-Macro disquiet drowns out signs of base metals shortages – by Eric Onstad (Reuters U.K. – October 4, 2018)

https://uk.reuters.com/

LONDON, Oct 4 (Reuters) – Uncertainty about how metals demand will be hit by trade wars, rising U.S. interest rates and a slowdown in China is weighing on industrial metals prices, submerging signals pointing to potential shortages.

The index of copper and five other top industrial metals traded on the London Metal Exchange has shed 11 percent this year while prices for the worst-performing metals, zinc and lead, have tumbled by about a fifth.

But as speculators pile on bearish positions and investors flee from the metals market during tit-for-tat trade volleys, signs of metals shortfalls are building.

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Guinea’s bauxite boom upending rural communities – HRW – by Joe Bavier (Reuters Africa – October 4, 2018)

https://af.reuters.com/

JOHANNESBURG, Oct 4 (Reuters) – As mining companies in Guinea ramp up bauxite production, they are upending rural communities and undermining air and water quality while government authorities fail to rein in abuses, Human Rights Watch (HRW) said in a report on Thursday.

In the past three years, the West African nation, Africa’s biggest producer of the aluminium ore, has seen bauxite output explode, mainly on the back of demand from China.

Despite the growth in economic activity however, Guinea’s bauxite mining heartland has been racked by unrest in recent years, fuelled by the frustrations of the local population.

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Ford CEO says Trump’s metal tariffs cost auto maker $1-billion – by Nick Carey and David Shepardson (Globe and Mail/Reuters – September 27, 2018)

https://www.theglobeandmail.com/

Steel and aluminum tariffs imposed by the Trump administration have cost Ford Motor Co about $1-billion in profits, its chief executive officer said on Wednesday, while Honda Motor Co said higher steel prices have brought “hundreds of millions of dollars” in new costs.

“From Ford’s perspective the metals tariffs took about $1-billion in profit from us,” CEO James Hackett said at a Bloomberg conference in New York, “The irony of which is we source most of that in the U.S. today anyway. If it goes on any longer, it will do more damage.”

Hackett did not specify what period the $1-billion covered, but a spokesman said the automaker’s CEO was referring to internal forecasts at Ford for higher tariff-related costs in 2018 and 2019.

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NEWS RELEASE: NAFTA Deal a Sell-Out for Canadian Steel, Aluminum Workers

TORONTO, Oct. 1, 2018 /CNW/ – Tens of thousands of Canadian families have been left in the lurch from concessions made by the Liberal government to get a deal with the Unites States on a renegotiated North American Free Trade Agreement.

“Time and time again during the NAFTA renegotiations, the Liberal government assured Canadians that it was defending our steel and aluminum sectors and the livelihoods of tens of thousands of Canadian families,” said Ken Neumann, United Steelworkers (USW) Canadian Director.

“Given the Liberal government’s rhetoric throughout the process, it was inconceivable that it would agree to any deal that harms Canada’s steel and aluminum sectors,” Neumann said.

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U.S. `Takes Grenade Off the Table’ With Tweak to Rusal Sanctions – by Jack Farchy and Yuliya Fedorinova (Bloomberg News – September 18, 2018)

https://www.bloomberg.com/

The U.S. has laid the groundwork to avoid a brewing crisis in the global aluminum market. By making a technical tweak to sanctions on United Co. Rusal on Friday, the U.S. Treasury handed a potential lifeline to buyers of aluminum whose annual contracts with the Russian company are soon due to expire.

That makes it less likely there will be a repeat of the chaos that gripped the aluminum market in April when the curbs were first imposed.

Crucially, the U.S. said that Rusal’s existing customers could negotiate some new contracts, but stopped short of lifting the aggressive sanctions off Oleg Deripaska, the Russian billionaire who has been accused by the U.S. of links to organized crime and bribery.

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Canada’s Aluminum Valley grapples with U.S. tariffs – by Emma Jacobs (Market Place.org – September 17, 2018)

https://www.marketplace.org/

Canada’s Aluminum Valley is a two-hour drive north of Quebec City, in the region of Saguenay—Lac-Saint-Jean. Five aluminum smelters along a 50-mile stretch of the Saguenay River account for almost half of Canada’s aluminum production.

This has residents here following negotiations between Canada and the United States over a new North American Free Trade Agreement especially closely, with hopes an accord will clear the way to lifting tariffs on Canadian steel and aluminum in place since June.

The first smelter opened in this region in 1926 was built by Americans, attracted by plentiful hydroelectricity. The adjoining company town was named Arvida, after industrialist Arthur Vining Davis. The structures from the Arvida smelter are still part of the large Jonquière Complex, which includes two of the smelters and a refinery.

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Commentary: Relief for Rusal, but aluminium’s political risks remain – by Andy Home (Reuters U.K. – September 17, 2018)

https://uk.reuters.com/

LONDON The United States has thrown Russian aluminium company Rusal a lifeline by loosening sanctions imposed on the company in April. Critically, the U.S. Treasury has tweaked its sanctions to allow Rusal to enter into new contracts with existing customers.

This is good news for the Russian company, which has been shunned by buyers negotiating 2019 shipments. It’s also good news for the aluminium market, which was facing the prospect of 3.7 million tonnes of Rusal product being locked out of the supply chain.

However, the broader sanctions threat against Rusal, a by-product of the sanctions against its oligarch owner Oleg Deripaska, remains. An Oct. 23 deadline for customers to wind down business with the company still stands, leaving any new contracts still beholden to the same underlying uncertainty about when sanctions will be fully lifted.

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Simmering Alcoa Labor Dispute Morphs Into ‘Clash of the Titans’ – by Sandrine Rastello and Joe Deaux (Bloomberg News – September 11, 2018)

https://www.bloomberg.com/

Workers of the Alcoa Corp.-controlled Becancour smelter in Quebec stand guard under umbrellas outside the gates. Whenever a vehicle approaches, a pair scurries to take down the driver’s details and make sure there’s no scab laborer in disguise.

The ritual, witnessed on a rainy August morning, has become part of life at the aluminum plant since January, when the company locked out more than 1,000 employees represented by the United Steelworkers union. The entrance is also where tensions have flared as the conflict, which started over pensions and recruitment rules, turned into a deadlock.

For Pittsburgh-based Alcoa, the dispute has resulted in a production decline at the plant, adding to pressures resulting from U.S. aluminum tariffs that have hit its three smelters in Canada. The company is now seeking deeper changes — including reduced payrolls — to make the plant more competitive. For their part, workers say they’ve already made concessions and are fighting to retain seniority rights.

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Aluminum Risks Return to Crisis With Rusal Left Out in the Cold – by Mark Burton and Yuliya Fedorinova (Bloomberg News – September 10, 2018)

https://www.bloomberg.com/

The aluminum industry is running out of time to avoid another crisis as U.S. sanctions leave United Co. Rusal locked out of crucial contract negotiations kicking off this week in Berlin.

The U.S. allowed Rusal customers with existing supply deals to keep doing business with the company until Oct. 23, but not to sign new contracts.

Unless the U.S. Treasury lifts the sanctions in time — which remains a possibility — the No. 2 supplier of aluminum will be sidelined from the annual negotiations and could soon be forced to scale back output of products used in everything from alloy wheels to airplane fuselages.

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Aluminum Seen Facing ‘Doomsday’ If Rusal Sanctions Proceed (Bloomberg News – September 7, 2018)

https://www.bloomberg.com/

Aluminum faces a “doomsday scenario” if the U.S. proceeds with sanctions on United Co. Rusal in October, according to Wood Mackenzie Ltd., which says prices could exceed their seven-year highs in April.

The market outside China is already in deficit, and would go “into a massive shortage” if a producer the size of Rusal can’t supply metal, Julian Kettle, vice chairman of metals and mining, said in an interview in Singapore. “Prices will move to a level where you will get demand destruction” as buyers start switching to alternative materials, he said.

Aluminum spiked in April after U.S. sanctions on Rusal upended global supply chains, which were already under pressure from lower output at Alunorte in Brazil.

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Aluminum products maker Arconic in talks to sell itself: sources – by Harry Brumpton and Greg Roumeliotis (Reuters U.S. – August 24, 2018)

https://www.reuters.com/

(Reuters) – Aluminum products maker Arconic Inc is discussing acquisition offers for the entire company, even though it announced a sale process last month only for its building and construction systems unit, people familiar with the matter said.

The move comes after Arconic, which was spun out of Alcoa Corp in 2016, said in February it would carry out a “strategy and portfolio review,” to be completed by the end of 2018, but has provided little detail about what this entails.

Arconic is speaking with private equity firms that have shown interest in acquiring the company, including a consortium of Blackstone Group LP and Carlyle Group LP, another consortium of KKR & Co and Onex Corp, as well as Apollo Global Management LLC, the sources said on Friday.

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COLUMN-U.S. disrupts aluminium supply chain, but not where it counts – by Andy Home (Reuters U.K. – August 23, 2018)

https://uk.reuters.com/

LONDON, Aug 23 (Reuters) – In the United States, old aluminium smelters are being brought back to life. On Wednesday Century Aluminum held an official ceremony to celebrate the reactivation of the first of three idled potlines at its Hawesville plant in Kentucky.

The smelter, which first started production in 1969, has been running at just 40 percent of its 252,000 tonne annual capacity since 2015 and was teetering on the edge of full closure.

Hawesville’s life-line has come from the imposition of 10-percent tariffs on U.S. imports of aluminium and Commerce Secretary Wilbur Ross was guest of honour at yesterday’s official bash. In Russia, meanwhile, old aluminium smelters are being closed down.

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