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Aluminium/Bauxite

Rusal’s first quarter profits fall as sanctions impact lingers – by Polina Ivanova (Reuters U.S. – May 14, 2019)

https://www.reuters.com/

(Reuters) – First quarter net profit halved at United Company Rusal year-on-year as the lingering effects of U.S. sanctions and depressed global prices hit the Russian aluminum giant.

However the weak performance is likely to be a one-off event, analysts said, as Rusal continues on the road to recovery following 10 months under U.S. sanctions that severely limited its operations and sent shockwaves through global aluminum markets.

In late January Washington lifted the sanctions, imposed on Rusal and its co-owner Oleg Deripaska in April 2018, after intense negotiations and a series of organizational changes within Rusal.

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Financing deals, deficit to buttress physical aluminum prices – by Pratima Desai (Reuters U.S. – May 9, 2019)

https://www.reuters.com/

LONDON (Reuters) – Aluminum tied up in financing deals and collateral for loans, shortages and inventory draws will sustain prices in the physical market even as funds expecting sluggish demand sell derivatives.

Financing deals involve buying aluminum now and selling it forward for a higher price and profit after storage and interest costs have been deducted. These deals are often on a monthly basis and rolled over, but traders say some recent deals go out to December 2019 and March 2020.

Physical premiums in Europe, paid above benchmark London Metal Exchange prices around $1,800 a tonne, fell to $60 a tonne early January in anticipation of the removal of sanctions on Russian aluminum giant Rusal.

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Column: Rusal’s political comeback powered by “green” aluminium – by Andy Home (Reuters U.K. – May 8, 2019)

https://uk.reuters.com/

LONDON (Reuters) – Political rehabilitation doesn’t get much better. Just over a year ago Russian aluminium producer Rusal was hit with swingeing sanctions by the U.S. government.

The company’s owner, Oleg Deripaska, was accused of a litany of misdeeds by the Treasury Department’s Office of Foreign Assets Control (OFAC), all of which he denied, and his sprawling industrial empire, including Rusal, was slapped with secondary sanctions.

Those sanctions were lifted in January after Deripaska agreed to reduce his control in Rusal. Just three months later in April Rusal landed a major equity and supply deal with Braidy Industries, which is planning a state-of-the-art aluminium rolling mill in Kentucky.

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Column: Aluminium’s bull narrative is lost in the shadows – by Andy Home (Reuters U.K. – April 29, 2019)

https://uk.reuters.com/

LONDON (Reuters) – “This is a tangible, clear story which is really going to effect price, spreads and premiums”. The story in question, according to Eoin Dinsmore, head of primary aluminium and products research at CRU, is a building supply deficit in the aluminium market.

Dinsmore’s presentation at the research house’s aluminium conference in London last week was titled: “Don’t doubt the deficit”. Yet hardly anyone outside of the aluminium market believes in this unfolding bull narrative.

Financial players are “simply not interested” in aluminium, according to Colin Hamilton, managing director of commodities research at BMO Capital Markets.

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China slams province for failing to curb polluting industries (Reuters Africa – April 22, 2019)

https://af.reuters.com/

SHANGHAI, April 23 (Reuters) – China’s environment ministry reprimanded provincial officials in Shandong, the country’s biggest aluminium producing province, for failing to comply with policies to cut coal consumption and curb the growth of highly polluting aluminium output.

Shandong has been a key part of China’s efforts to curb pollution in the industrial north, but it has struggled to find cleaner forms of growth.

Seven of the province’s cities were set targets to cut smog over the winter, but only one – Jining – managed to do so.

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Canada shouldn’t ratify new trade deal until steel, aluminum tariffs end: Steelworkers – by Kerri Breen (Global News – March 31, 2019)

https://globalnews.ca/

The head of Canada’s steelworkers’ union says the federal government should refuse to ratify the new North American trade deal until U.S. tariffs on steel and aluminum have been lifted.

Ken Neumann told The West Block‘s Mercedes Stephenson that Ottawa needs to “draw a line in the sand” on the matter. It’s been nearly a year since the Trump administration imposed a 25 per cent tariff on imports of steel from Canada and 10 per cent on aluminum.

The measure prompted the Canadian government to impose $16.6 billion in retaliatory tariffs on American goods such as whiskey and washing machines.

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Guinea risks ‘conflict and confusion’ with mining eviction policy – by Nellie Peyton (Reuters U.K. – March 21, 2019)

https://uk.reuters.com/

DAKAR, March 21 (Thomson Reuters Foundation) – Civil society groups rejected Guinea’s first policy seeking to protect people displaced by mines and dams on Thursday, saying it would worsen poverty and conflict in the mineral-rich nation.

Seven human rights and development organisations asked the government not to adopt the proposed national standards for relocating and compensating displaced communities, and to spend the next six months consulting with local people instead.

“If the document is adopted like this, it means the problem will never be resolved,” said Mamady Koivogui, executive director of the Association for Mines Without Poverty, one of the groups which hosted a Conakry news conference on Thursday.

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Column: New controversy engulfs London Metal Exchange’s warehouses – by Andy Home (Reuters U.K. – March 13, 2019)

https://uk.reuters.com/

Long load-out queues earlier this decade generated media scandal, a flurry of legal action and intense regulatory scrutiny of the exchange. The ensuing raft of reforms to its storage network appeared to have laid the issue to rest.

Not so. At the end of February, there was a 229-day queue to get aluminium out of warehouses in Malaysia’s Port Klang. That’s business days, not calendar.

Some of that metal is at the centre of a dispute between the warehouse operator, ISTIM, and trading powerhouse Glencore, which has lodged a complaint with the LME. The argument turns on the minutiae of the exchange’s labyrinthine warehouse rules but the underlying problem remains the same as ever.

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Rio Tinto start-up team to shape future growth – by Luke Housego (Australian Financial Review – March 10, 2019)

https://www.afr.com/

Rio Tinto chief executive Jean-Sébastien Jacques says a new internal start-up team that will work across the group’s operations will help shape how the resources giant looks in the decades to come.

“We’ve been around for 137 years – I have no doubt in my mind that the Rio you will experience in 10 or 20 years from now will be very different from the Rio today,” Mr Jacques said.

“Because I’m an old-timer from that perspective – what resonates with me I know will not resonate with my daughters or resonate with the next generation of people who run Rio Tinto.”

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‘Nice and dirty’: Rio’s new mine taps aluminium boom – by Darren Gray (Sydney Morning Herald – March 9, 2019)

https://www.smh.com.au/

Construction jobs always involve a few risks, but for the workers who built Rio Tinto’s new $2.6 billion Amrun bauxite mine on Cape York, some of the safety procedures were particularly unique.

The advice to workers was quite snappy, much like the risk sometimes observed in the water or on the riverbanks in the area: always keep at least six metres from the water’s edge, always face the water when near it, and, of course, always carry a big stick.

Because a potential threat, which is also spelt out in large signs at a ferry terminal Amrun mine workers must travel through en-route to work, is of a potential crocodile attack.

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Canada threatens not to ratify USMCA until U.S. ends steel, aluminum tariffs – by Adrian Morrow (Globe and Mail – February 26, 2019)

https://www.theglobeandmail.com/

Canada is threatening to not ratify the renegotiated North American free-trade pact if U.S. President Donald Trump doesn’t first remove steel and aluminum tariffs, in a bid to restart serious talks over the punitive duties.

Canadian officials have been privately delivering this warning to their U.S. counterparts and members of Congress for several weeks, said government sources with knowledge of the discussions, before Transport Minister Marc Garneau went public with a version of the message on Sunday.

The move is designed to use Canada’s last opportunity to leverage the new United States-Mexico-Canada Agreement (USMCA) – one of Mr. Trump’s priority policies – to put pressure on the White House into ending its trade war with Ottawa.

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The United States’ aluminum tariff wall is crumbling – by Andy Home (Reuters U.S. – February 19, 2019)

https://www.reuters.com/

LONDON (Reuters) – It is almost a year since the United States imposed duties on imports of aluminum and steel on national security grounds. If the aim of the so-called “Section 232” tariffs was to lift domestic production, President Donald Trump’s administration can claim a degree of success.

U.S. output of primary aluminum has started rising sharply thanks to restarts of idled capacity, although not all of them have been directly down to the 10-percent import tariff.

If, however, the aim was also to tackle rising import penetration, particularly by Chinese aluminum producers, tariffs may already have passed peak effectiveness. Ever more gaps are appearing in the aluminum trade wall as the number of exclusions granted for specific products lengthens.

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Canada won’t ratify new NAFTA until steel and aluminum tariffs lifted, warns key U.S. Senator – by Naomi Powell (Financial Post – February 14, 2019)

https://business.financialpost.com/

Canada and Mexico won’t consider ratifying the revised North American Free Trade Agreement unless the United States lifts its tariffs on steel and aluminum imports, U.S. Senator Chuck Grassley said Tuesday.

Grassley, who held meetings with Foreign Affairs Minister Chrystia Freeland and Mexico’s Ambassador to the U.S. Martha Bárcena Coquilast week, said the levies are now the “biggest impediment” to approving the deal.

“The Senate in Mexico is not going to take it up until the tariffs are off,” Grassley said during a call with reporters. “The House of Commons in Canada’s not going to take it up if it’s not there soon after March 1 and it’s not going to be there unless the tariffs are off. And even Republicans and Democrats in the Congress of the United States say those tariffs have to go off.”

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OPINION: Trump’s metal tariffs end up favoring China’s steel and aluminum over Canada’s – by Erin Dunne (Washington Examiner – February 11, 2019)

https://www.washingtonexaminer.com/

President Trump has many justifications for his tariffs: national security, pushing back on unfair trade deals, and protecting American manufacturing. Not on the list: playing favorites with Chinese imports over those from neighboring Canada. But through the convoluted exclusions process of U.S. tariffs, that’s exactly what has happened.

As the CBC reported, about 40 percent of U.S. imports of Chinese steel have been excluded from the 25 percent tariffs imposed by the Trump administration and 86 percent of imports of Chinese aluminum, otherwise subject to a 10 percent tariff, have been excluded.

For comparison, only 2 percent of U.S. imports of Canadian steel are free from tariffs and less than 1 percent of aluminum. So how did this happen?

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Trump orders agencies to buy U.S.-made steel, aluminum and cement ‘to the greatest extent’ possible – by Naomi Powell (Financial Post – February 7, 2019)

https://business.financialpost.com/

A new executive order from U.S. President Donald Trump aims to strengthen his Buy America initiative by “encouraging” agencies to purchase a wider range of U.S.-made materials for infrastructure projects.

The order, published Thursday, urges agency heads to purchase more American-made construction materials for infrastructure projects ranging from surface transportation and water infrastructure to energy transmission, broadband internet and cybersecurity projects.

It follows on Trump’s 2017 “Buy American, Hire American” executive order, which tightened standards for federal procurement departments and companies that hire foreign workers.

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