Archive | Aluminium/Bauxite

LME ring goes dark as aluminum lurches to 45-month low – by Eric Onstad (Reuters/Financial Post – March 23, 2020)

https://business.financialpost.com/

LONDON — The London Metal Exchange open-outcry ring went dark for the first time since World War II on Monday and aluminum prices slumped to their lowest since June 2016 on fears of a severe global recession. The 143-year-old LME temporarily closed its circle of padded, red-leather seats, Europe’s last open-outcry trading venue, to fight the virus.

The transition to full electronic trading on the LME went smoothly, but volumes were patchy, traders said. “Things are going okay, it’s just difficult to see volumes as there’s little liquidity. It also feels very weird trading while looking at my garden, it’s really lacking market atmosphere,” one trader said from his home.

Base metals joined stocks, oil and other financial markets in a sell-off on Monday while Shanghai copper fell to the weakest in nearly 11 years. Continue Reading →

Column: Will aluminium heed the lesson from last demand shock? – by Andy Home (Reuters U.K. – March 17, 2020)

https://uk.reuters.com/

LONDON (Reuters) – China’s aluminium smelters lifted production by 2.4% over the first two months of this year. The increase was testament to producers’ ability to keep operating over the worst of the coronavirus outbreak in China.

Unfortunately, the same cannot be said of the country’s aluminium processing sector, which transforms raw metal into semi-manufactured products (“semis”) and which is only now limping back to normality.

The disconnect is becoming evident in surging stocks held in Shanghai Futures Exchange (ShFE) warehouses. With end-use demand collapsed in key sectors such as automotive, the dissonance with rising smelter production becomes ever more striking. Continue Reading →

Exclusive: Aluminum smelter resurrected on Trump tariffs may close as losses mount – by Tim McLaughlin (Reuters U.S. – February 28, 2020)

https://www.reuters.com/

MARSTON, Missouri (Reuters) – A bankrupt aluminum smelter that re-opened in 2018, after U.S. President Donald Trump imposed tariffs on imported metals, is losing money at such a rapid clip that it could close within 60 days, the top executive at the Missouri plant said on Thursday.

Trump’s trade policies protect the generic aluminum product made by Magnitude 7 Metals LLC, a 50-year-old smelter on the banks of the Mississippi in southeastern Missouri. But the tariffs often do not cover the value-added aluminum products being shipped to the Unites States by foreign competitors, undercutting the company’s position.

“The rest of the world has gamed the tariffs, in our opinion,” Magnitude 7 Metals chief executive Charles Reali told Reuters in an interview. “The Commerce Department tried to help, but missed the mark.” Continue Reading →

Column: Coronavirus is double shock for China’s giant aluminium sector – by Andy Home (Reuters U.K. – February 21, 2020)

https://uk.reuters.com/

LONDON (Reuters) – The outbreak of the deadly coronavirus could not have come at a worse time for the aluminium market. Global aluminium demand fell last year for the first time since the global financial crisis.

Expectations of a demand recovery rested on China, which showed encouraging signs of a manufacturing revival towards the end of 2019. The virus and the accompanying quarantine measures have since chilled economic activity, representing a short-term demand shock for the world’s aluminium market.

It’s why the London Metal Exchange (LME) aluminium price sank to a three-year low of $1,685 per tonne at the start of February. The fear is that China’s aluminium smelters will keep churning out metal even as the country’s demand implodes. Continue Reading →

INSIGHT-Struggling state-owned firms hold Balkan economies back – by Daria Sito-Sucic (Reuters Africa – January 30, 2020)

https://af.reuters.com/

MOSTAR, Bosnia, Jan 30 (Reuters) – The aluminium smelter in the Bosnian town of Mostar has fallen eerily silent since its electricity was cut in July. The only visitors to what was once a model factory in former Yugoslavia are staff filling in redundancy papers.

The closure of debt-laden Aluminij Mostar is symptomatic of the challenges facing countries across the Balkans as they try to keep loss-making state-owned businesses inherited from the communist era afloat in market economies.

The demise of the aluminium exporter also shows how 25 years after the end of the Bosnian war, everything from ethnic rifts to weak corporate governance to corruption are hindering growth, just as the world economy is slowing and European Union membership looks ever more remote. Continue Reading →

Indonesian Mining Giant Seeks to Triple Aluminum Production – by Eko Listiyorini (Bloomberg/Yahoo Finance – January 21, 2020)

https://finance.yahoo.com/

(Bloomberg) — PT Indonesia Asahan Aluminium has set a long-term goal of tripling its production capacity by expanding operations to the island of Borneo as it seeks to utilize the region’s abundant bauxite reserves.

The state-owned company known as Inalum plans to boost capacity to 750,000 tons by building a 500,000-ton smelter in North Kalimantan, on the Indonesian side of Borneo, as power supply constraints limit the expansion of its sole facility in Kuala Tanjung, North Sumatra, according to Managing Director Oggy Achmad Kosasih. He didn’t give a timeline.

The existing smelter relies on electricity from a hydro plant that can only provide enough power for 250,000 tons of aluminum a year, Kosasih said in an interview on Monday in Kuala Tanjung. The company is trying to increase output to 300,000 tons by upgrading its furnace, he said. Continue Reading →

Attack on aluminum is unmerited – by Lauren Wilk (Automotive News – January 20, 2020)

https://www.autonews.com/

Lauren Wilk is the Vice president, policy and international trade for the Aluminum Association.

If the facts are not on your side, pound the table and yell like hell — an old saying that evokes the steel industry’s latest environmental attack against the aluminum industry (“Manufacturing materials count in vehicles’ impact on planet,” Dec. 9).

When the largest material by volume regularly focuses attention on the second most used material, it suggests grave concern. Perhaps it is because, as DuckerFrontier recently confirmed again, aluminum is the fastest-growing automotive material, gaining market share from steel, year over year.

When steel industry studies boast that steel is the greatest, perhaps skepticism is merited. Here’s what independent experts confirm: Continue Reading →

Column: Another spin of the giant LME aluminium stocks carousel – by Andy Home (Reuters U.K. – Janaury 14, 2020)

https://uk.reuters.com/

LONDON (Reuters) – The giant London Metal Exchange (LME) aluminium stocks carousel is spinning again. LME-registered inventory surged by 58% to a two-year high of 1.49 million tonnes between the middle of November and the middle of December as 600,000 tonnes of metal flooded into exchange warehouses.

No sooner had it arrived than the cancellations started. A total 633,675 tonnes have been earmarked for physical load-out since Dec. 16, including another 35,075 tonnes on Monday.

Drawdowns are now accelerating. Load-outs averaged 13,330 tonnes per day last week. Monday’s tally of 15,375 tonnes was the highest daily departure rate since May last year. There are another 619,075 tonnes to follow. Continue Reading →

‘They lost’: Canadian aluminum industry, opposition balk over auto provisions in new NAFTA – by Naomi Powell (Financial Post – December 12, 2019)

https://business.financialpost.com/

The exclusion of aluminum from tighter auto requirements in the new NAFTA could see Mexico become a back door for China to push the metal into the United States, industry officials and union leaders say.

Canada, the United States and Mexico agreed Tuesday to an amended North American Free Trade Agreement that includes tougher enforcement provisions for labour reforms, a strengthened dispute resolution mechanism, and weaker protections for the pharmaceutical industry.

The deal also included a last-minute change to a requirement calling for 70 per cent of the steel and aluminum used in auto production to be purchased in North America. Under the newly tweaked rules, steel must be “melted and poured” by primary steelmakers in North America in order to receive preferential tariff treatment. No provision was added for aluminum. Continue Reading →

COLUMN-Aluminium producers prepare for troubled times ahead – by Andy Home (Reuters U.S. – December 9, 2019)

https://www.reuters.com/

LONDON, Dec 9 (Reuters) – The aluminium market is in trouble again. The London Metal Exchange (LME) price touched a three-year low of $1,705 per tonne in October and has failed to stage any significant bounce over the intervening period. It is currently trading around the $1,760 level.

Earlier this year there was a lot of excited talk in the market about growing supply deficits and falling stocks. Fast forward to today and LME stocks are surging again and no-one is talking about deficits any more.

LME stocks are a poor lens through which to understand aluminium’s dynamics but the rapid increase in visible tonnage has reinforced concerns about a deteriorating demand outlook. Continue Reading →

UPDATE 7-Trump, citing U.S. farmers, slaps metal tariffs on Brazil, Argentina – by Andrea Shalal and Gabriel Stargardter (Reuters Africa – December 2, 2019)

https://af.reuters.com/

WASHINGTON/RIO DE JANEIRO, Dec 2 (Reuters) – U.S. President Donald Trump ambushed Brazil and Argentina on Monday, announcing he would restore tariffs on U.S. steel and aluminum imports from the two countries in apparent retaliation for currency weakness he said was hurting U.S. farmers.

“Effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries,” Trump wrote in an early morning tweet that sent officials from both countries scrambling for explanations from Washington. He added that Brazil and Argentina were “presiding over a massive devaluation of their currencies.”

In fact, the opposite is true: Both countries have actively been trying to strengthen their respective currencies against the dollar. The real and the peso have been buffeted by weakness partially linked to Trump’s trade battle with China. Continue Reading →

Copper prices seen stifled by growth fears next year: Reuters poll – by Eric Onstad and K. Sathya Narayanan (Reuters U.S. – October 28, 2019)

https://www.reuters.com/

LONDON/ (Reuters) – Prices of copper and other industrial metals are expected to be capped next year as weak economic growth weighs on the market, a Reuters poll showed.

The London Metal Exchange index of six base metals has inched up only 1% so far this year, held back by worries about a possible global recession and a trade war between the United States and top metals consumer China.

But the average is deceptive, because sharp gains for nickel of over 50% cover the fact that half of the metals are in the red, with losses of up to 15%. Continue Reading →

Rio Tinto says miners need to leverage technology as scrutiny of the industry rises (Reuters U.S. – October 28, 2019)

https://www.reuters.com/

LONDON, Oct 28 (Reuters) – Mining companies should make more use of technology to respond to increasing demands from investors and communities for responsible mining practices, Rio Tinto CEO Jean-Sébastien Jacques said on Monday.

Technologies such as autonomous rail-cars and increased automation can lower the impact of the industry on the environment as well as raise profit margins, he said, adding that blockchain can be deployed to track if the supply chain met ethical standards.

“There is absolutely no doubt in my mind we will face greater regulation and scrutiny,” Jacques said in a keynote speech marking the beginning of London Metal Exchange (LME) Week in London. Continue Reading →

Mining Giant Sends Shock Waves Through New Zealand’s Stock Market – by David Winning and Robb M. Stewart (Wall Street Journal – October 23, 2019)

https://www.wsj.com/

The lights abruptly went out on New Zealand’s long-running stocks rally Wednesday. The reason: A global mining giant’s threat to pull the plug on the country’s biggest buyer of electricity.

The NZX-50 index had been among the world’s best-performing stock benchmarks this year, notching a 26% gain through Tuesday. But it fell 2.1%, close to a three-week low, after Rio Tinto PLC said its Tiwai Point smelter is unprofitable, citing high energy costs and historically low aluminum prices because of oversupply in the market.

The selloff illustrates how small stock markets can be especially vulnerable to big corporate decisions. Tiwai Point, which employs roughly 1,000 people and has been in operation for nearly half a century, is the single biggest user of electricity in New Zealand, where it accounts for roughly 14% of energy demand. Continue Reading →

Column: Sustainability the new battleground for aluminium producers – by Andy Home (Reuters U.K. – October 22, 2019)

https://uk.reuters.com/

LONDON (Reuters) – Another year, another portfolio review by Alcoa. The U.S. aluminium producer has just announced a five-year review of around 4.0 million tonnes of alumina capacity and 1.5 million tonnes of smelter capacity.

Assets will be improved, curtailed, closed or sold. It’s not quite an annual event but Alcoa shareholders have been here many times before as the company keeps trying to move down the cost curve in the face of chronically depressed prices.

On the London Metal Exchange (LME) three-month aluminium has ground steadily lower over the course of 2019 and at a current $1,720 per tonne is close to the near three-year low of $1,705 recorded earlier this month. Continue Reading →