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Aluminium/Bauxite

Reeling Aluminum Market Braces for Mining Giant Alcoa’s Outlook – by Joe Deaux (Bloomberg News – April 23, 2020)

https://www.bloombergquint.com/

(Bloomberg) — With the coronavirus crisis clouding the outlook for almost every industry, the aluminum market is hoping to get at least a glimpse of what’s in store from top U.S. producer Alcoa Corp. on Wednesday.

Aluminum, found in everything from jets to iPhones, has been among the worst-performing commodities during the crisis as governments lock down large swathes of their economies. Speculation is rising that the pandemic will spur shutdowns of smelters, which extract the metal from ore for use in applications.

Alcoa, which is set to report first-quarter results on Wednesday, typically also provides an outlook. It forecast in January that global supply would exceed demand by as much as 1 million metric tons this year.

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Canned Food Sprees Won’t Save Aluminum – by Clara Ferreira Marques (Bloomberg News – April 6, 2020)

https://www.bloomberg.com/

Aluminum isn’t the worst-performing base metal this year, an honor that goes to copper. Yet that’s only because it had less far to fall: Demand was ailing well before the coronavirus forced some three billion people to stay home.

Add the near-total shutdown of the world’s auto and aviation industry, crunching more than a third of demand, and the lightweight metal is fast heading for levels last seen during the global financial crisis.

That should translate into some of the mining industry’s deepest cuts as the pandemic forces producers such as Alcoa Corp. and Rio Tinto Group to take long-overdue decisions.

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Column: Collapsing auto sector a body blow for industrial metals – by Andy Home – Reuters U.K. – March 27, 2020)

https://uk.reuters.com/

LONDON (Reuters) – France’s Recylex has just announced the temporary closure of both its German lead smelter and two battery-recycling plants, one in Germany and one in France.

The decision is due to a “strong drop in demand, especially in the automotive sector, in a context of sharply lower metal prices,” the company said. It will surely not be the last lead producer to mothball its production facilities.

Lead is umbilically tied to the automotive sector. Lead-acid batteries account for around 80% of global usage of the metal. And carmakers just about everywhere have halted their own production lines due to the spread of the coronavirus and the lockdowns on activity that have followed in its wake.

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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.

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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.

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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.”

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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.

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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.

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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.

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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:

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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.

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‘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.

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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.

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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.

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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%.

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