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Aluminium/Bauxite

Alcoa’s stock surges in its first full quarter as standalone company – by Joe Deaux (Bloomberg/Globe and Mail – April 25, 2017)

http://www.theglobeandmail.com/

Alcoa Corp.’s first full quarter as a standalone company vindicates investors’ faith and signals even better times may be ahead.

Profit excluding one-time items was 63 cents a share, New York-based Alcoa reported after the close of regular trading Monday, exceeding all seven estimates of analysts tracked by Bloomberg. Shares jumped as much as 7.1 per cent on Tuesday.

Shares have surged since the company separated from its jet– and car-parts business in November, helped by a jump in aluminum prices. Investors have also rewarded Alcoa for its thrift, as Chief Executive Officer Roy Harvey merges units and drives efforts to simplify operations. The results come as Arconic Inc., the downstream business that split from Alcoa, contends with a proxy battle fueled in part by concern over corporate spending.

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COLUMN-China ratchets up the pressure on its aluminium producers – by Andy Home (Reuters U.S. – April 21, 2017)

http://www.reuters.com/

Is aluminium the new steel for China’s policy-makers? The country’s steel producers are already being subjected to a host of measures intended to weed out excess capacity. A wholesale restructuring of the enormous steel sector is a key component of the country’s declared war on pollution.

It also provides some negotiating leeway for China when it comes to dealing with the growing international pressure to rein in exports. China’s aluminium producers, which like their steel counterparts now dominate global supply, seem to be next in line for “supply-side reform”.

Threats to close capacity in the region around Beijing over the winter heating months had already propelled aluminium prices higher. They have just been given a further boost by news that Beijing has ordered the suspension of new capacity in the northwestern province of Xinjiang. Further measures seem certain to follow.

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Alcoa Swaps New York for the City of Steel – by Joe Deaux (Bloomberg News – April 20, 2017)

https://www.bloomberg.com/

Alcoa Corp. is giving up the glamour of New York City and going back to Pittsburgh, as new Chief Executive Officer Roy Harvey steps up efforts to streamline the aluminum maker.

Changing headquarters and closing seven locations across the U.S., Europe and Asia is part of a push to lower costs after the producer of the light-weight metal split from its jets- and auto-parts business last year. Alcoa called Pittsburgh, known as the steel city, home for decades until it moved to New York in 2006.

At an industry conference in February, Harvey said his key priorities for the company moving forward would sound like “apple pie and ice cream” to Americans in the audience: “simplify, simplify, simplify.”

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Rio Tinto Sees Bumpy Ride for Aluminum as China Poses Puzzle by Joe Deaux and Danielle Bochove (Bloomberg News – April 3, 2017)

https://www.bloomberg.com/

Rio Tinto Group’s aluminum boss sees prices for the lightweight metal heading for an “extremely” volatile period, with uncertainty over when China will curb production helping to keep investors on edge.

“That’s really where the uncertainty is at the moment,” Alfredo Barrios said in an interview at Bloomberg’s Toronto office. “There’s no doubt that if you look at the supply side, if you look at the environmental issues, sooner or later that will change. But when is a question mark.”

China has ordered curbs on steel and aluminum output in as many as 28 northern cities during the winter heating season as it steps up its fight against pollution, people with knowledge of the matter said early in March.

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Lessons learned from demise of Northwest Washington State aluminum industry – by Don Brunell (The Courier-Herald – April 3, 2017)

http://www.courierherald.com/

Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com

Driving east along SR 14 these days, you see water pouring out of Columbia River dams. It is already a high water year with much of the runoff from our heavy mountain snowpack yet to come.

It is part of our “feast or famine” weather cycle. As you pop over the hilltop near the historic Maryhill Museum, you look down to see John Day Dam with its floodgates open spilling massive amounts of water.

Then you see remains of the razed Goldendale Aluminum Co. smelter next to the dam. That plant once accounted for 1,300 jobs, $40 million in personal income and $2 million in Klickitat County taxes. Now, you just see concrete pads, a water tower and a small office.

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Canadian aluminum caught between China’s rise, U.S. protectionism – by Ian McGugan (Globe and Mail – April 1, 2017)

http://www.theglobeandmail.com/

By his calculation, about 150,000 manufacturing jobs in the United States depend on imported Canadian aluminum. “Few people realize how connected and complementary the industries have become,” he says. “Both economies are very, very interlinked in terms of aluminum.”

Aluminum, one of the world’s more mundane metals, has suddenly turned into a dramatic case study in how global trade tensions can cast clouds of uncertainty over a swath of the Canadian economy.

Part of the challenge to Canadian manufacturers of the metal is nothing new. It consists of a seemingly endless wave of low-cost aluminum from Chinese smelters. Over the past decade, the Asian giant’s surging production has clobbered competitors around the world and dragged down prices of the metal by nearly a third.

But now, the relentless rise of Chinese aluminum is being met by a surge of protectionism, particularly in the United States.

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[Aluminum Related Manufacturing] Boeing and Washington’s Aerospace Industry, 1934-2015 – by Jim Kershner (September 8, 2015)

http://www.historylink.org/

For instance, aluminum, produced with cheap hydroelectric power in Spokane,
Longview, and other cities, almost immediately became the state’s second-
biggest wartime industry. Much of that aluminum was bound for Boeing, where
it was fashioned into wings and fuselages.

The Boeing Company, founded in 1916, hit a low point in 1934 when it was forced out of the airline business and was forced to concentrate on its original airplane-manufacturing business. The company’s fortunes revived in the buildup to World War II. Thousands of workers swarmed over Boeing’s plant on Seattle’s Duwamish River, making the bombers and fighters that helped win the war. Employment topped 50,000 by 1944.

After the war Boeing entered the newly lucrative commercial-airliner market, and the Cold War revived its military contracts. In the 1950s and 1960s it diversified into an aerospace company and built missiles and rockets. The demise of the SuperSonic Transport (SST) program in 1971 resulted in the infamous Boeing Bust, a statewide economic downturn caused by the loss of 86,000 jobs. Boeing recovered over the ensuing decades, despite increasing competition from Europe’s Airbus. Meanwhile, hundreds of other aerospace companies sprang up in Washington to supply parts.

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Premiums up, stocks down; is the aluminum market tightening? – by Andy Home (Reuters U.S. – March 31, 2017)

http://www.reuters.com/

LONDON – Japanese aluminum buyers will pay a premium for their second-quarter metal deliveries of $128 per tonne over the London Metal Exchange (LME) cash price. This represents a sharp jump from the $95 negotiated for first-quarter shipments. It is also the highest premium since the second quarter of 2015, when the aluminum premium bubble was rapidly deflating.

Meanwhile LME stocks of aluminum sank below the 2 million-tonne level earlier this month and at a current 1,886,400 tonnes are at their lowest since December 2008. Excluding the metal that is awaiting load-out, the on-warrant total of 1,003,275 tonnes is the lowest since May 2008.

The LME outright price is trading just shy of the $2,000 per tonne level for the first time since early 2015. It’s a combination that in most commodity markets would indicate a tightening in availability.

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COLUMN-Aluminium sector seeks way to tackle China-induced instability – by Andy Home (Reuters U.S. – March 23, 2017)

http://www.reuters.com/

LONDON, March 23 The political heat is rising in the aluminium market, with a trio of industry bodies calling on the G20 to address global market imbalances resulting from China’s burgeoning output.

“China’s state-sponsored support is contributing to an unsustainable structural overcapacity that will impact growth and contribute to heightened instability until it is addressed.”

So wrote the heads of the U.S. Aluminum Association, its cross-Atlantic peer European Aluminium and the Aluminium Association of Canada in a March 15 open letter to the Group of 20 leading economies. What they want is the sort of global forum created to discuss steel overcapacity at last year’s G20 summit.

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Queensland suppliers awarded $900M of Rio Tinto’s Amrun bauxite project contracts – by Leo Oliver (International Business Times – March 23, 2017)

http://www.ibtimes.com.au/

Mining giant Rio Tinto has awarded contracts worth $1.38 billion for the development of the Amrun bauxite mine project. Of these, Queensland suppliers have received nearly two-thirds, amounting to $900 million, of the contracts. More than 500 companies have been associated with the project in the state.

The project, in Cape York Peninsula, includes the development of a mine, processing plant and bauxite stockpiles, warehouses, a power station and new barge, ferry and ship loading facilities. It is expected to substitute the East Weipa bauxite mine.

The volume of bauxite to be exported from Cape York following the development of the mine is forecast to surge by nearly 10 million tonnes a year. Production and shipping is expected to kick-off in the first half of 2019.

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China to slash steel, aluminium output in bid to check smog (Australian Financial Review/Reuters – March 2, 2017)

http://www.afr.com/

China has ordered steel and aluminium producers in 28 cities to slash output during winter, outlined plans to curb coal use in the capital and required coal transport by rail in the north, as Beijing intensifies its war on smog, a policy document shows.

The 26-page document dated February 17 and seen by Reuters did not include some stringent steps proposed in a draft policy to slash fertiliser output and introduce a full ban on coal being handled at Tianjin, one of the country’s busiest ports.

The government has called on steel producers to halve output in four northern provinces – Hebei, Shanxi, Shandong, Henan – as well as Beijing and Tianjin, during the peak winter heating months around late November to late February. The size of the cuts will depend on the level of regions’ emissions cuts.

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Russia proposes creating aluminum OPEC: Trade Minister (Reuters U.S. – February 27, 2017)

http://www.reuters.com/

Russia is proposing the creation of an OPEC-like organization for the global aluminum industry, TASS news agency quoted Russian Industry and Trade Minister Denis Manturov as saying on Monday.

Russia’s Rusal was overtaken by China’s Hongqiao as the world’s biggest aluminum producer several years ago, as Rusal cut back its production capacity due to a fall in prices. Manturov told reporters about the idea of an aluminum-making group on the sidelines of an economic conference in Russia’s Black Sea resort of Sochi.

OPEC, the Organization of the Petroleum Exporting Countries, unites some of the world’s largest oil producers. Its members, together with non-OPEC oil producers such as Russia, agreed to reduce oil production and support global prices in 2016.

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[Former Alcan CEO] David Culver was a devoted CEO who fought to preserve history – by Fred Langan (Globe and Mail – February 24, 2017)

http://www.theglobeandmail.com/

David Culver was an athletic man who liked to keep trim by walking to work from his house in Montreal’s Westmount neighbourhood to his office at what was then the headquarters of Alcan Aluminium Limited, downtown in Place Ville Marie. When he became the chief executive officer of Alcan in 1979, one of the perks was a chauffeur to drive him to work.

Instead, Mr. Culver, who died on Feb. 6 at 92, would walk his two black labs over the mountain and have the chauffeur meet him on Pine Avenue – to pick up the dogs and take them home. Then he would continue down the hill on foot.

“It was the best 30 to 40 minutes I spent every day, giving me time to contemplate big issues and small and do it on my own,” he wrote in his autobiography, Expect Miracles: Recollections of a Lucky Life. He added that once in the office, life was taken over by phone calls, meetings and office politics. It was before the age of e-mail.

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Malaysia’s shooting-star bauxite industry faces burn up – by Emily Chow (Reuters U.S. – February 13, 2017)

http://www.reuters.com/

KUALA LUMPUR – Already under fire for widespread environmental damage, Malaysia’s once lucrative bauxite mining industry is facing a likely death knell from neighboring Indonesia’s move to allow a resumption of exports.

This time last year, Malaysia was the world’s biggest supplier of the aluminum-making raw material to top buyer China, but its exports tumbled after government action aimed at reining in the little regulated industry.

The latest move could spell the end for a sector that only sprang to life in late 2014 after Indonesia banned ore exports, and illustrates the risks facing miners across Southeast Asia from increasingly uncertain government policy.

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Aluminum’s parallel universes are colliding – by Andy Home (Reuters U.S. – February 14, 2017)

http://www.reuters.com/

LONDON – There was a time when the global aluminum market could be seen as two parallel universes, to borrow a phrase coined by Klaus Kleinfeld, chairman and chief executive of Alcoa.

There was China. And there was the rest of the world. The great dividing wall was China’s 15 percent export tax, effectively preventing the flow of primary metal out of what was already the world’s biggest volume producer.

There was always an element of wishful thinking in Kleinfeld’s parallel vision, ignoring as it did the flow of semi-manufactured aluminum products out of China. But in terms of physical and paper trading of commodity-grade aluminum, the analogy just about held, until only a few years ago.

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