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Aluminium/Bauxite

U.S. judge dismisses aluminum price-fixing litigation – by Jonathan Stempel (Reuters U.S. – October 5, 2016)

http://www.reuters.com/

NEW YORK – A federal judge on Wednesday dismissed nationwide litigation by aluminum purchasers who accused banks and commodity companies of conspiring to drive up prices for the metal by reducing supply, forcing them to overpay.

The decision by U.S. District Judge Katherine Forrest in Manhattan halts, for now, three years of litigation against Goldman Sachs Group Inc, JPMorgan Chase & Co, mining company Glencore Plc, and various commodity trading, mining and metals warehousing companies.

Purchasers had accused the defendants of colluding from 2009 to 2012 to manipulate prices by hoarding inventory. They claimed that this caused delays of up to 16 months to fill orders, leading to higher storage costs, which in turn inflated aluminum prices and the cost of producing cabinets, flashlights, soft drink cans, strollers and other goods.

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U.S. Aluminum Producers Step Up Calls for China Policy Probe – by Joe Deaux (Bloomberg News – September 28, 2016)

http://www.bloomberg.com/

The U.S. aluminum industry’s anti-China drumbeat is gaining volume in Washington this week.

A group that represents aluminum companies is calling for a “meaningful dialogue” with Chinese authorities in a bid to end what they say are incentives and subsidies that are fueling a global glut and squeezing U.S. producers out of the market.

The Aluminum Association is pressing for a deeper investigation by the U.S. International Trade Commission into Chinese policies to save what’s left of the domestic industry, the group’s chief executive officer Heidi Brock and chairman Garney Scott said in Washington on Wednesday. They are scheduled to give testimony Thursday at a Commission hearing.

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Aluminum premiums stabilize in Europe, U.S., Japan vulnerable – by Eric Onstad and Yuka Obayashi (Reuters U.S. – September 19, 2016)

http://www.reuters.com/

LONDON/TOKYO – Surcharges for physical aluminum have stabilized in Europe and the United States as more attractive financing deals and firmer demand tighten the market, but those in Japan are vulnerable to sliding further due to a glut of supply.

In all three regions, the surcharges, or premiums, which consumers pay on top of the London Metal Exchange cash price for immediate delivery, have steadily declined for most of the year, falling by around a third.

A key driver of the decline has been more material released from LME warehouses after the exchange toughened regulations, forcing warehouses to cut queues to get delivery of metal. European premiums were quoted in a wide range at $105-$135 a tonne for duty-paid metal in Rotterdam, with the upper end of the range up about $10 in recent weeks but still well down from $160-$185 at the start of the year.

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China denies aluminium exports evading U.S. duties (Reuters Africa – September 14, 2016)

http://af.reuters.com/

SHANGHAI, Sept 14 (Reuters) – A Chinese industry group has denied that the country’s aluminium producers could be involved in exporting extrusion products via Mexico to circumvent U.S. duties, in the latest sign of bubbling trade tensions between the two nations.

A report by the Wall Street Journal last week cited U.S aluminium executives contending that some $2 billion worth of Chinese metal products had been stockpiled in Mexico as part of a scheme to re-export to the United States, which imposes heavy duties on Chinese products.

The newspaper said a total of 1 million tonnes of aluminium products were previously spotted by a pilot commissioned by a U.S. aluminium executive to fly over a factory in Mexico.

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Cape York bauxite mining provides training and jobs for Aborigines in isolated towns – by Peter Michael (The Courier-Mail – September 11, 2016)

http://www.couriermail.com.au/

CAPE York’s vast reserves of bauxite are delivering pay dirt for some of the state’s most disadvantaged Aboriginal clans. Wik traditional owner Murray Korkatain is in the vanguard of a pipeline of training and jobs in bauxite mining.

He’s about to move into a Local Aboriginal Person traineeship as a mine operator, learning to work heavy equipment in an 18-month program. “I’ve had to overcome a lot of challenges, but I’m glad that I stuck at it because I’m excited to start my traineeship,” the Rio Tinto worker said yesterday.

“My motivation for work and to progress my career is to be a good role model for my children in Aurukun and ­others in the community. “My advice for others in Aurukun is to grab opportunities and give it a go. It’s not easy but it’s worth it.

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Guinea Goes From Zero to Hero for World’s Top Aluminum Maker (Bloomberg News – September 9, 2016)

http://www.bloomberg.com/

Guinea will pass Australia to become China’s main source of bauxite next year as the world’s biggest aluminum maker boosts imports of the raw material from the West African nation that supplied almost nothing just two years ago.

Shipments from Guinea to China will reach as much as 13 million metric tons this year, up from just 300,000 tons in 2015 and negligible volumes in 2014, according to Ron Knapp, secretary general of the International Aluminum Institute.

That will take Guinea past Malaysia to become the number two supplier, and shipments will advance in 2017 to beat Australia, Knapp said Thursday in an interview at an industry conference in Shanghai. He didn’t give specific volume forecasts for 2017.

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China’s Swoop on Boeing Supplier Points to Aluminum’s Future (Bloomberg News – September 6, 2016)

http://www.bloomberg.com/

China’s emergence as the world’s biggest aluminum maker has shaken up the industry, creating a surplus that forced competitors to close plants as profit fell. Alcoa Inc., an iconic U.S. producer for more than a century, has shuttered all but one smelter and plans to split itself in two. While some companies begin to show signs of stanching the red ink, there’s probably more disruption ahead.

After dominating the market for raw aluminum, China wants to expand its ability to make higher-value products with the commodity. The biggest step so far was the announcement last week that Chinese aluminum entrepreneur Liu Zhongtian will acquire Cleveland-based Aleris Corp. for $2.3 billion.

The deal gives the founder of China’s largest producer of extruded aluminum greater access to American and European technology, as well as buyers that include aerospace manufacturers like Boeing Co. and automakers such as Audi.

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Chinese-owned Zhongwang USA enters U.S. aluminum market with Aleris buy – by Luc Cohen(Reuters U.S. – August 30, 2016)

http://www.reuters.com/

NEW YORK – Zhongwang USA LLC, backed by Chinese aluminum magnate Liu Zhongtian, said on Monday it would buy U.S. aluminum company Aleris Corp in a bet by the billionaire that the nascent U.S. automotive aluminum sector will be the industry’s next big growth market.

The $2.33 billion deal comes as Liu and Zhongwang International Group Ltd, the parent of Zhongwang USA, are embroiled in a dispute over U.S. import duties amid broader trade tensions between the U.S. aluminum industry and China. It marks the biggest entry by a Chinese company into the U.S. aluminum industry since trade tensions began ramping up in recent years.

Zhongwang International is parent of China Zhongwang Holdings Ltd, the world’s second-largest producer of aluminum extrusions. It has been accused of evading U.S. import duties on extruded products, prompting an investigation by the U.S. Department of Commerce (DOC).

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Enough Aluminum Already – by David Fickling (Bloomberg News – August 26, 2016)

https://www.bloomberg.com/

If you learned of a product that was about to see a ninefold surge in demand over 15 years, you’d be crazy not to start making it, right? Wrong. If you were in the commodity business, you’d first want to check what was about to happen to supply.

Take Chinese aluminum. Consumption rose from 3.4 million metric tons in 2000 to 31 million tons last year — but production capacity increased almost 14-fold, to 36 million tons. As a result, LME-traded aluminum forwards now cost about $1,650 a ton, almost exactly the same price as you’d have paid at the dawn of the millennium.

That supply-side problem explains why aluminum prices have consistently failed to fulfil the promise that fueled deals like Rio Tinto’s $38 billion 2007 takeover of Alcan.

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Global aluminum production is falling, but for how long – by Andy Home (Reuters U.S. – August 25, 2016)

http://www.reuters.com/

LONDON – Global aluminum production fell by 1.2 percent to 33.12 million tonnes in the first seven months of this year, according to the International Aluminium Institute (IAI).

It doesn’t sound like much and in volume terms the decline amounts to just 390,000 tonnes, no more than a drop in the global aluminum ocean.

But this is the first year that output has consistently fallen since 2009, a year when financial crisis was rapidly morphing into manufacturing crisis with devastating consequences for aluminum producers.Equally noteworthy are the divergent trends between dominant producer China and the rest of the world.

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Bad air from Rio Tinto aluminum smelter forcing her to move, Kitimat resident says – by Andrew Kurjata and Robin Batchelor (CBC News British Columbia – August 23, 2016)

http://www.cbc.ca/news/canada/british-columbia/

Move highlights continued battle between company and community over air quality in Kitimat

A Kitimat woman says she is being forced to leave the community due to sulphur dioxide emissions coming from Rio Tinto Alcan’s aluminum smelter. Sheena Cooper blames an increase in SO2 [sulphur dioxide] in the air for a spate of asthma attacks that have put her in hospital and on increased medication.

“At this point, it’s we need to get out of this town so I can get healthy again,” Cooper said of the decision to move her, her husband and their two children to the nearby community of Terrace.

Cooper said she’s suffered from asthma since she was five years old, but until this year its effects have been mild. That changed in March, when she suffered a series of attacks and had to check into hospital seven times. She is now using prednisone, antibiotics and a higher dose of inhaler.

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Aluminum price-fixing claims rejected by U.S. appeals court – by Jonathan Stempel (Reuters U.S. – August 9, 2016)

http://www.reuters.com/

NEW YORK – A U.S. appeals court on Tuesday upheld the dismissal of nationwide antitrust litigation accusing banks and commodity companies of conspiring to drive up aluminum prices by reducing supply, forcing them to overpay.

By a 3-0 vote, the 2nd U.S. Circuit Court of Appeals in Manhattan said so-called commercial end users and consumer end users lacked standing to sue because their alleged antitrust injuries were too far removed from the alleged misconduct.

The plaintiffs had accused Goldman Sachs Group Inc, JPMorgan Chase & Co, the mining company Glencore Plc, and various commodity trading, metals mining and metals warehousing companies of having colluded from 2009 to 2012 to rig prices by hoarding inventory.

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Century-Old Bond for Aluminum Smelters and Utilities Falls Apart – by Harry Weber and Sonja Elmquist (Bloomberg News – July 14, 2016)

http://www.bloomberg.com/

The business of making aluminum in the U.S. is collapsing — and no other industry has watched the demise as closely as the one that supplies the power used to create molten metal in giant pots.

For more than a century, America’s aluminum processors and the electricity generators grew together. Utilities sought out smelters that, in some cases, became their largest consumers. And the metal makers counted on utilities to supply an energy source that accounts for as much as a third of their costs.

Their fates were so linked that, “if the smelters were not built, then the power plants wouldn’t have gotten built,” said Lloyd O’Carroll, a Richmond, Virginia-based commodities analyst with CRU Group.

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Alcoa Investors Looking for More Answers to $13 Billion Question – by Sonja Elmquist (Bloomberg News – June 28, 2016)

http://www.bloomberg.com/

Alcoa Inc. investors are hoping for more detail Wednesday on how the biggest U.S. aluminum producer will divide about $13 billion of liabilities as it prepares to split itself into two.

The question of how Alcoa’s more than $8 billion in debt and $5 billion in pension liabilities will be split among the companies is key to determining the value of the spin-offs. That will show whether Chief Executive Officer Klaus Kleinfeld can achieve his target of an investment-grade manufacturing company, renamed Arconic, and a viable aluminum-producing company retaining the Alcoa name.

Alcoa is scheduled to release before the start of regular trading Wednesday the divided companies’ legal, capital and governance structure and plans for allocating assets and liabilities. On Sept. 29, the day after the split was announced, Alcoa said it intended for the combined company’s debt to be retained by Arconic.

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In aluminum market it’s still China versus rest of world – by Andy Home (Reuters U.S – June 20, 2016)

http://www.reuters.com/

LONDON – “China has committed to ensure that its central government policies and support do not target the net expansion of steel capacity; and to actively and appropriately wind down ‘zombie enterprises’ through a range of efforts, including restructuring and bankruptcy.”

This statement was made by U.S. Treasury Secretary Jack Lew earlier this month after high-level talks with Chinese officials in Beijing. There is plenty of devil in the missing detail, not least the scale of steel production overcapacity in China, but at least there seems to have been some meeting of minds.

Not so when it comes to China’s equally giant aluminum sector, however. The two sides failed to reach any sort of agreement other than to hold more talks, according to Lew. Producers in the rest of the world will remain beholden to China’s own aluminum dynamics, it seems.

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