MAPPING AUSTRALIA’S NET ZERO INVESTMENT POTENTIAL
Net zero emissions target for Australia could launch $63bn investment boom
Modelling shows moving towards a net zero emissions economy would unlock financial prospects in sectors including renewables and manufacturing
Sun 11 Oct 2020 17.30 BSTLast modified on Tue 13 Oct 2020 14.14 BST
Shanghai exchange to study aluminium bar futures
OCTOBER 15, 20201:04 PM
Vedanta delisting fiasco: What should you do with your Vedanta shares now?
Last Updated: Oct 13, 2020, 03:45 PM IST
By Shubham Raj
Analysts believe commodity prices have been recovering, which bodes well for the company. Meanwhile, what the company will do with $3.15 billion that it borrowed from the market to fund delisting will also be keenly watched.
EU imposes tariffs on aluminium products from China
OCTOBER 13, 202011:45 AM
BRUSSELS (Reuters) - The European Union will impose duties of up to 48% on imports of aluminium extrusions from China midway through an investigation into whether Chinese producers are selling at unfairly low prices.
The EU official journal said on Tuesday that the duties, ranging from 30.4 to 48.0%, would apply from Wednesday. The duties are provisional, meaning they will apply until the investigation’s expected completion by April.
GFG Alliance targets more aluminum acquisitions, 1 mil mt/year capacity: CEO
19 Oct 2020 | 13:03 UTC London
Author Diana Kinch
Editor Jonathan Loades-Carter
European aluminum demand up, output down: Gupta
GFG seeks to further 'green aluminum' drive
London — London-based metals and energy group GFG Alliance plans to boost its aluminum production capacity to at least 1 million mt/year within the next two years via acquisitions, Executive Chairman and CEO Sanjeev Gupta told the London Metals Exchange (LME) Seminar Oct 19.
This would be up from the group's current capacity of almost 600,000 mt/year of aluminum production, Gupta told delegates at the virtual event.
"We're targeting more acquisitions," he said. "Aluminum will play a vital role in the transition to a sustainable world, by reducing the weight in electric cars, for example: we see growing demand ahead."
Gupta did not say where further expansions might take place, but indicated they would be in Europe. GFG's current aluminum capacity is focused on Europe, where earlier this year it consolidated its recent aluminum acquisitions -- including Europe's biggest aluminum smelter at Dunkirk, the Lochaber smelter in Scotland and the Duffel rolling mill in Belgium -- together in its Alvance subsidiary, headquartered in Paris.
"We have to reduce aluminium's carbon footprint dramatically," Gupta said. "In aluminium as with steel, this is an area where Europe can lead...now is the time to create a low carbon aluminium industry right here in Europe."
Europe's aluminum consumption has risen 7% over the last 15 years but production in the region has fallen 20% over the same period, Gupta noted. The shortfall has been made up mainly by imports from China, where the aluminum industry uses a lot of coal and "has a huge carbon footprint," he said.
GFG's SIMEC energy subsidiary earlier this month announced it is making a major renewable energy investment in northwest Spain, in a 1.2 GW solar and wind power facility to be completed in 2023, and which may facilitate the group's entry into energy intensive industrial production in Spain.
The group has also been involved in talks for a potential acquisition of US aluminum giant Alcoa's troubled San Ciprian smelter in Galicia, northwest Spain, which has been plagued by high electricity prices: however no agreement had been reached by the end-September deadline for talks to be concluded and Alcoa has announced this smelter will close.
Sources close to GFG have nonetheless indicated the group may still be interested in taking over the 228,000 mt San Ciprian smelter.
China's exports of unwrought aluminium and aluminium semis rose 7.7% MoM in September amid lower SHFE/LME price ratio and pre-holiday restocking
Oct 19,2020 08:28
SHANGHAI, Oct 19 (SMM) – China exported 426,000 mt of unwrought aluminium and aluminium semis in September, up 7.7% month on month and down 2.1% year on year, according to customs data. Exports from January to September totalled 3.56 million mt, down 18.6% from a year ago.
Slightly lower SHFE/LME aluminium price ratio and restocking by overseas buyers ahead of the long Chinese National Day holidays contributed to the month-on-month increase. However, exports continued to decline on a year-on-year basis as COVID-19 hurt overseas consumption and as unwrought aluminium alloy, which accounts for a big share of unwrought aluminium and aluminium semis, shifted from net exports to net imports this year due to import restrictions on aluminium scrap.
Exports are unlikely to increase significantly in October, in light of possible resurgence of COVID-19 overseas and increasing anti-dumping measures.
China aluminum output hits daily record in September
OCTOBER 19, 202010:40 AM
By Emily Chow, Tom Daly
SHANGHAI (Reuters) - China’s aluminum production rose in September from a year earlier as prices recovered and new smelters came on line, official data showed on Monday, with daily output reaching a record high.
The world’s top producer of the metal churned out 3.16 million tonnes of primary aluminum in September, the National Bureau of Statistics said, up 7.9% from a year earlier.
That equates to daily output of 105,333 tonnes, a record for daily production.
Last month’s output was down slightly from the record 3.171 million tonnes produced in August, which has one more day than September.
aluminum prices have seen a steady recovery from four-year lows hit in March, when the coronavirus outbreak ravaged demand, incentivising smelters to produce as much metal as possible. Shanghai aluminum prices fell 1.3% in September but hit their highest in 2-1/2 years on Monday.
In the first nine months of 2020, aluminum production totalled 27.45 million tonnes, the bureau said, up 2.8% from a year earlier and on course to set a full-year record after a rare fall in 2019.
Research house Antaike estimates 375,000 tonnes of new annual capacity came on stream last month and a further 160,000 tonnes of capacity restarted.
Among the smelters to launch new projects were China Hongqiao Group and Yunnan aluminum, both in Wenshan in Southwest China’s Yunnan province, said CRU analyst Wan Ling.
“(September production rose) due to the ramp up of new capacities in Yunnan and Sichuan,” said Wan.
Wan also pegged China’s aluminum output for the last quarter of the year at 9.404 million tonnes, a 7.1% gain from the corresponding period last year and up 1.5% from the previous quarter, due to the new capacities and restarts.
China’s production of 10 nonferrous metals - including copper, aluminum, lead, zinc and nickel, rose to 5.32 million tonnes in September from the previous month. It was also up about 7% from September 2019, and set a monthly record high.
January-September output for this group - which also includes tin, antimony, mercury, magnesium and titanium - was up 3.5% year-on-year at 45.18 million tonnes.
Reporting by Emily Chow and Tom Daly; Editing by William Mallard, Himani Sarkar and Ana Nicolaci da Costa
Aluminum industry at crossroads, steelworkers fear
October 19, 2020 12:36 A.M.
Updated at 1:00 p.m.
BÉCANCOUR - “Quebec aluminum is at a crossroads. It is time to bring to light ambitious projects, promising for the future and especially jobs. Now is the time to start building new facilities, modernize existing ones and focus on transforming and improving energy performance. ”
Vthis is the main recommendation submitted by the United Steelworkers as part of the consultation on the Quebec Aluminum Development Strategy initiated by the Quebec government last month.
In a brief that was to be submitted before October 16, the Syndicate deplores that expansion and future projects are not present at the companies.
“While the future prospects for the aluminum sector are good, we do not feel that the companies that operate aluminum smelters in Quebec are showing a great vision to enter new markets. The projects are abandoned one after the other by the aluminum smelters ”, they denounce.
It evokes the abandonment in the fall of 2019 of the project of a billet factory at the Alma factory in Rio Tinto and around sixty AP-60 technology tanks at Arvida.
"Another distressing sign that Quebec does not appear in the plans of the multinational aluminum companies, everything is in place for the expansion of the Alma plant (Alma II) at a lower cost," notes the Union.
And Alcoa is no exception. “During the long conflict at ABI in Bécancour, the employer also let the prospect of investments dangle, which have not yet materialized. Everything seems ready for an increase in amperage, which is not confirmed. The casting center of the Bécancour facilities would also benefit from being the subject of investments ”, we raise in the brief of fifteen pages.
According to the Steelworkers, the list of excuses to put various investment projects on hold is long. First and foremost is uncertainty in trade relations with the United States.
“But the evil is deeper. For several years now, we have felt a distance from the decision-making centers within the aluminum giants. Fewer and fewer Quebec leaders are in a position of authority and have the development of facilities in Quebec at heart, ”we observe.
This is not to mention that "companies, increasingly financialized, systematically seek a short-term return on their investments, generally within a horizon of less than two years". "It is hardly compatible with large-scale projects, with a vision for the future," underlines the Union.
“The factories of which we represent the members, in Alma and Bécancour, are performing well. They are among the best performing in North America. But the signs do not lie: when companies give up investing, it is because they are practicing squeezed lemon management. We get the maximum possible, with the least possible investment. A factory in which we do not invest, in the long term, it is a factory that we condemn to a slow death, ”says the union side.
For the Steelworkers, Quebec is well placed to formulate requests to the companies. “After all, the very basis of their business in Quebec rests on the considerable advantages granted to these companies, in the form of hydroelectric rights, electricity discounts and others, which amount to billions of dollars. The Government of Quebec must be stronger to ensure the future of the production and processing of aluminum in Quebec ”, we believe.
In the opinion of the Syndicate, we must therefore force the hand of multinationals, formulate offers that cannot be refused, set the table so that the logical choice that must be made is that of investing in the future of the production of aluminum in Quebec.
The brief therefore suggests that the State take a stake, beyond subsidies and investments. We give the example of Norsk Hydro when the Norwegian state owns 34.3% of the aluminum giant, making it the main shareholder.
"We can imagine a model where a company would be created to launch new projects, in which Investissement Québec would be a partner, alongside multinational aluminum companies," we suggest.
Moreover, as fewer and fewer workers are needed to produce a ton of aluminum, increasing primary processing capacities is one of the ways to maximize spinoffs in Quebec by creating jobs, says the Union.
"Investments in the Alma billet factory or even in the ABI casting center easily fall into this category," it says.
The Steelworkers consider that the lack of vertical integration of activities has probably harmed the various companies that have taken over the transformation activities of aluminum smelters, "costing good jobs in Quebec".
When it comes to developing green technologies, remember that everything has been in place for twenty years at the Alma plant to build a brand new plant, "a favorite place to open a first plant using technology. Elysis ”.
If the Syndicate invites the government of Quebec to support the increasingly diversified uses of aluminum, it warns it against the temptation to invest in projects whose main goal would be to increase the competitiveness of the installations only. by rationalizing jobs. In other words, he asks the Quebec government to pay attention to 4.0.
“Government leadership has made the difference in the past in launching the aluminum smelters that we are proud of today. We are counting on the Quebec government to once again deploy this necessary leadership, ”we conclude.
Рейтинг крупнейших компаний по России по объему реализованной продукции
Максим Ремизов , Евгений Огородников , Ксения Клепча
«Эксперт» №43 (1181)
16 - EN+
21 - РУСАЛ
Sustainable mining of bauxite needed for India to be global aluminium hub
Aluminium, a metal of strategic importance for India to attain its goal of becoming a $5 trillion economy, continues to be a highly imported metal
Updated: October 19, 2020, 13:54 IST
New Delhi: Import of bauxite, one of Indias most abundant ores, has caused an estimated forex loss of over $400 million in the last 5 years alone and caused missed opportunities of generating mass scale employment.
Experts say bauxite mining creates livelihood opportunities in regions which otherwise have limited potential for other economic activities. Opening of a single Bauxite mine has the potential to generate over 10,000 livelihood opportunities and can garner over Rs 5,000 crore to the State revenue over the life of the mine.
Aluminium, a metal of strategic importance for India to attain its goal of becoming a $5 trillion economy, continues to be a highly imported metal.
This is despite India having the world's fifth largest coal and bauxite reserves, both of which are important raw materials for aluminium production.
This is in addition to the fact that India is the 3rd largest producer and consumer of aluminium globally with domestic demand expected to expand from current 4 MTPA to 12 MTPA by 2030. For this, a multi fold growth in bauxite production from current levels of 20-22 Million Ton to 72 Million Tons per year is needed to meet the domestic requirement.
To this essence, tapping the country's 3.8 Billion Tons Bauxite reserves is a key step to gravitating India towards becoming self-reliant.
"It is a travesty that even with such abundant bauxite reserves and available aluminium capacity for value addition in the country, no Metallurgical Grade Bauxite Mines have been successfully auctioned in the last 5 years since inception of MMDR Act 2015 forcing the domestic industry to import. The eco-friendly and sustainable mining methods lead to economic, social and environmental harmony. Thus, utilizing India's natural bauxite dividend should be a policy priority to realise the vision of an AatmaNirbhar Bharat," said Ansuman Das, Former Chairman and Managing Director, NALCO and metals and mining expert.
Aluminium is of strategic importance and is a critical raw material in defence, transportation, electricity, aerospace, automobile, consumer durables and many more sectors.
It is an essential commodity for various other industries/SMEs due to its critical role in diversified applications. With huge Investments of over Rs 1.5 lakh crore the sector creates over 20 lakh direct and indirect jobs and has developed over 4,000 SMEs (Small and Medium Enterprises in the downstream sector.
The abnormality of the arbitrary determination of Average Sale Price (ASP) of Metallurgical Grade of Bauxite linked with the selling price of the end-product.
Aluminium has led to various state governments being unable to auction the bauxite mineral blocks as the present system of Bauxite ASP Calculation will make the production of aluminium unviable in the country. Additional and planned investment of over Rs 50,000 crore in the aluminium sector has been put on halt as it has been deemed futile in the current Bauxite Average Sale Price regime.
Indian aluminium producers have introduced sustainability measures to restore land that has been mined to a natural and economically usable state for rehabilitation and livelihood. Land with rich bauxite reserves is mostly barren and uncultivable.
After the mined-out area is reclaimed by backfilling of the top layer soil, the surface is brought back to the original ground level and then becomes cultivable.
Today, the mining commitment includes extensive re-greening of the mined land and proactive participation in the socio-economic development of communities around. There are significant opportunities to implement technology-driven scientific mining techniques in bauxite mining in India as most of India's bauxite reserves are located on a single plateau making bulk open cast mining possible.
The time is now right to try and resolve the Bauxite Average Sale Price issue by aligning it to bring it in line with other bulk minerals, auction the available Bauxite Mines and fully utilize the potential of the domestic Aluminium Industry to become self-reliant, save precious foreign exchange which will lead to creation of wide range of employment opportunities locally while yielding rich socio-economic dividends for all stakeholders.
🔥 В акциях EN+ (ENPG) замечены три триггера, которые могут привести ко взлёту акций до максимумов года:
1. Сильные операционные результаты 27 октября. Динамика по энергетическому сегменту с высокой долей вероятности превзойдёт ожидания аналитиков за счёт роста цен на элетроэнергию в Сибири. Это значит, что свободный денежный (база расчёта дивидендов) будет выше ожиданий.
👉 На результатах за 2 квартал акция выросла на 30%: https://t.me/AK47pfl/5283
2. Рост цен на алюминий. Цены на алюминий в рублях достигли максимума с середины 2018 года. Причина – высокий спрос со стороны Китая - крупнейшего потребителя алюминия в мире. Это значит, что результаты Русала (RUAL) будут лучше ожиданий.
3. Взлёт акций Норникеля (GMKN) и Русала. Акции Русала выросли на 5.5% за 2 дня на фоне скорого объявления по дивидендам Норникеля. Дивиденды Норникеля, скорее всего, окажутся выше ожиданий. Это приведёт к росту акций Норникеля, Русала и EN+.
👉 Справедливая цена ENPG 890 рублей, апсайд +25%.
👉 Справедливая цена RUAL 39 рублей, апсайд +16%.
👉 Справедливая цена GMKN 28000 рублей, апсайд +39%.
#анализ #ENPG #RUAL #GMKN
🔬 Ситуация на рынке алюминия благоприятна для En+ (ENPG) и Русала (RUAL) . Цены на алюминий в рублях достигли максимума с середины 2018 года, когда цены аномально выросли на фоне санкций против Русала. Причина – высокий спрос со стороны Китая - крупнейшего потребителя алюминия в мире. Китай нарастил импорт до максимума за 11 лет на фоне устойчивости роста экономики страны к коронавирусу.
En+ и Русал – бенефициары высоких цен на алюминий. Помимо Русала от слабого рубля и сильного алюминия выигрывает En+, который владеет 56.9% Русала. Обе компании не могут закрыть гэп 2018 года, несмотря на выросший с 2018 года в 2 раза Норникель и растущий алюминий.
En+ и Русал могут вернуться к докризисным уровням. Текущие макроэкономические условия и финансовое положение En+ и Русала лучше, чем в 2018 и в начале 2020 года. Сейчас компании могут восстановиться, что предполагает апсайд 20-30%.
#анализ #RUAL #ENPG
🇨🇳#алюминий #китай #металлы
BBG: Китай вполне может стать мировым лидером восстановления спроса на алюминий в 4кв 2020г.
Импорт алюминиевой продукции в Китай вырос по итогам 8 месяцев текущего года на 347%, до 1,64 млн т. Импорт необработанного алюминия и алюминиевой продукции в Поднебесную вырос в августе на 9,8% к июлю и на 724% относительно августа 2019 г.
Резкий рост китайского спроса на алюминий в основном связан с планами властей по развитию инфраструктуры, электросетей и автомобильной отрасли
Кукуй, это чего?
Вот такая подпись была к этой ссылке, в телеге:
17:39: МКПАО «ОК РУСАЛ» Представление в регистрирующий орган уведомления об итогах выпуска (дополнительного выпуска) ценных бумаг
"русал" - в заголовке (независимый)
Нет, не допка. Это вот
International Aluminium Institute publishes global recycling data
Published 20th October, 2020 by Nadine Bloxsome
The International Aluminium Institute (IAI) has released global aluminium recycling data.
According to figures from the IAI, recycling just one aluminium can conserves enough energy to recharge up to 20 mobile phones, while global aluminium recycling saves enough energy every year to power the whole of France.
Commenting on the recycling data, Marlen Bertram, IAI’s Director - Product Stewardship said:
“Aluminium is one of the most recycled materials on earth. Today, the global recycling efficiency rate is 76%. High recycling rates in all regions underline the economic and environmental value of aluminium scrap. With comprehensive statistical data and pioneering material flow analysis, the IAI can track scrap globally from source to consumer by product, quality, form and region.”
The release of figures coincides with the third World Statistics Day (20th October), which is celebrated every five years. This year, World Statistics Day will reflect on the importance of trust and authoritative data.
Over the last 40 years, the IAI has provided the most credible, representative and authoritative data for the global aluminium industry and continues to provide reliable statistics and rigorous analytical expertise.
Ms Bertram noted: “With comprehensive statistical data and pioneering material flow analysis, the IAI can track scrap aluminium globally from source to consumer by product, quality, form and region.”
According to the IAI, every year, more than 30 million tonnes of aluminium scrap is recycled globally, ensuring its status as one of the most recycled materials on the planet.
Ms Bertram said: “Aluminium is central to a sustainable future, because of its unique combination of properties, including lightness, strength, durability, and recyclability. Rapid population and economic growth over the coming decade mean that global demand for aluminium will double through to 2050, and this will be met by 50% to 60% recycled metal. To ensure a sustainable circular economy, especially post-COVID, we need to improve and maintain high recycling rates across the world."
Aluminium can be remelted and reused without any impact on its unique properties. This means that aluminium products can be recycled repeatedly.
According to the IAI, Europe has the highest Recycling Efficiency Rate (RER) in the world, recovering 81 per cent of aluminium scrap available in the region.
North America has the world’s highest Recycling Input Rate (RIR) with 57 per cent of the metal produced in the region originating from scrap.
China, which is the largest consumer of both primary and recycled aluminium, also produces more than 10 million tonnes of scrap aluminium each year, accounting for a third of the annual global total.
BC needs a carbon tax that protects environment and jobs – mining association
20TH OCTOBER 2020
EDITED BY: MARIAAN WEBB
Miners in British Columbia – a large steelmaking coal producer – have called for changes to the province’s carbon tax, arguing that the playing field has to be levelled to aid final investment decisions and help the provincial economy recover and grow.
The Mining Association of British Columbia (MABC) argues that the province’s carbon tax should provide mines and smelters in British Columbia the same support as those in other Canadian provinces and territories.
“We need a carbon tax that protects both the environment and jobs. The reality is we can have both,” said British Columbia’s president and CEO Michael Goehring.
“While BC is a leader in climate action, all our competitors either have no carbon tax or protect their mining sectors from the impacts of carbon pricing. This adversely impacts our ability to compete and succeed globally, hurting workers and mining communities.”
In 2019, the BC Mining Jobs Task Force delivered a report to government containing 25 recommendations to support mining and to create and sustain mining jobs for workers across the province. The report identified the carbon tax as the single greatest barrier to helping the industry succeed and compete in the global market.
Currently, 46 national and 32 subnational jurisdictions have a price on carbon and British Columbia’s carbon tax is among the highest in the world. MABC states that all jurisdictions with carbon pricing, except British Columbia, provide meaningful support for their mining industries.
The association says that Covid’s impact has left the province struggling. Nine British Columbia mines are expected to reach the end of their productive life and close, leaving only five operating mines in 2040, if no new projects advance. While there are a number of mine expansions and new mines under consideration, they are not guaranteed.
“BC mining can help our province’s economic recovery and help fight global climate change. BC has among the lowest greenhouse gas (GHG) emissions minerals and metals in the world, which are the essential building blocks of clean and renewable energy technologies, like low emission vehicles and solar panels,” added Goehring.
MABC engaged Ed Mansfield, of Mansfield Consulting, to analyse carbon taxation on mining in British Columbia and competing jurisdictions. Mansfield found that British Columbia mining is at a significant competitive disadvantage, relative to all competitors because they either do not price carbon, or they protect their mining industries and workers from increased costs owing to carbon pricing and policies.
Mansfield reviewed British Columbia’s aluminium, copper and steelmaking coal against competition in the US, Australia, Chile, Russia and the Middle East.
Mansfield’s report concluded that a jurisdiction with a high carbon tax, with no protection for a trade-exposed industry like mining, may lead to a shift in economic activity to a jurisdiction with lower carbon costs, but higher GHG emissions, which is referred to as carbon leakage.
Along with the change to the carbon tax, MABC is seeking improvements to the regulatory framework for mining. While British Columbia has some of the highest regulatory standards in the world, the Mining Jobs Task Force identified the need to improve its clarity and predictability. In doing so, British Columbia can have a world-leading regulatory regime that fosters innovation and environmental protection and supports jobs and economic growth.
As the World Bank concluded on October 13, in order to meet the Paris Agreement targets, ambitious climate action will require a large-scale transition to clean energy which will drive significant demand for minerals. This, MABC says, presents British Columbia with a significant opportunity to be a leading supplier of responsibly produced, low-carbon minerals and metals to help the world transition to a low carbon economy.
“Adjusting the carbon tax does not put at risk our ability to meet our provincial GHG targets. Nor will it necessarily lead to higher GHG from the mining sector,” added Goehring.
“It will create a level playing field for British Columbia mines with our competitors in Ontario, Quebec and the territories, while also continuing to incentivise emissions reductions.”
Apparent aluminum deficit drives up spot prices against longer dates
OCTOBER 20, 20201:28 PM
By Pratima Desai
LONDON (Reuters) - Shortages of aluminum for financing deals have significantly boosted prices of metal that can be bought for spot delivery or on physical markets against those for longer dated maturities such as three or six months ahead.
Given a large market surplus, which Macquarie’s Vivienne Lloyd estimates at 1.84 million tonnes this year, and aluminum inventories at 1.4 million tonnes in London Metal Exchange approved warehouses, the idea of shortages would seem to be contradictory.
But the issue is availability or a deficit of free-floating aluminum not tied up in deals where the warehouse firm shares the rent for storing metal with the company that put it into the warehouse on LME warrant -- a title document.
Traders say most of the free-floating aluminum is in Port Klang, Malaysia.
“Aluminium has been taken off LME warrant in Port Klang, but it isn’t going outside Malaysia,” an aluminum industry source said. “When aluminum moves in Port Klang, it’s for financing or rent deals, not for consumption.”
The discount or contango for the LME’s cash against the three-month contract at $16 a tonne is down from above $40 a tonne in September.
That price differential for many traders no longer covers interest or storage costs for metal on LME warrant, making deals which involve buying aluminum now and selling for a future date at higher prices unprofitable.
Aluminium on LME warrant typically costs more than 50 cents a day a tonne to store, while rent for off-warrant metal mostly ranges between 5 and 15 cents a day, which could mean profitable financing deals.
Inventories of aluminum in LME warehouses in Port Klang at 814,225 tonnes are down about 20% since climbing above one million tonnes in July.
With cancelled warrants -- metal marked for delivery -- in Port Klang at 20%, more aluminum is due to leave LME warrant.
“The flows will reverse if things get so tight that we see backwardations (premiums) along the (maturity) curve,” a broking source said. “The market is expecting a large surplus this year, which will eventually be mopped up by financing deals.
(This story corrects to say contango instead of backwardation in paragraph 6.)
Reporting by Pratima Desai; editing by David Evans
PT HK Metals Utama Tbk (HKMU IJ) is an Indonesian-based holding company that engaged in the manufacturing and trading business of Aluminum Extrusion-based building and household materials. Established in 1995, the company was built from Aluminum Extrusion-based trading business. With the enormous potentials to keep growing, HKMU IJ developed into the leading company of 6 subsidiaries that operated in Aluminum Extrusion-based Building Material industry, Engineering Equipment and Household, both in manufacturing and trading segment.
Our vision is to be the largest Aluminum Extrusion-based building and household material company in Indonesia, both in manufacturing and trading segment. We believe, our synergy and strategy will take HKMU IJ to keep growing and developing, even to contribute significantly to the development of Indonesia.
Investor Bulletin 1Q 202015 July 2020
Management Presentation20 September 2018
01 October 2018Prospectus
Easing PSBB helps boost HK Metals (HKMU) business performance
Tuesday, October 20 2020 / 16:50 WIB
Reporter: Agung Hidayat | Editor: Khomarul Hidayat
KONTAN.CO.ID - JAKARTA . Aluminum extruded producer and distributor, PT HK Metals Utama Tbk ( HKMU ) hopes that the easing of large-scale social restrictions (PSBB) in Jakarta at this time will encourage the absorption of its products on the market. At least it can help the performance which is expected to decline this year.
Jodi Pujiyono, Director of HKMU said that the implementation of the PSBB had more or less affected HKMU operations which experienced obstacles. During the first period of PSBB easing, there was indeed an increase in demand.
However, this is only driven by restocking activities at building shops customers, because in general demand at end users is still relatively stagnant. "On the demand side, currently the conditions are still difficult, but the company still hopes that the reopening of the PSBB easing will have a positive impact on HKMU's business," Jodi told Kontan.co.id, Tuesday (20/10).
HKMU hopes that entering the end of 2020 there will be a slight increase. Usually at the end of the year market absorption capacity will increase considering the large amount of company and project budget utilization, both government and private, are running in this period.
Even though there is a chance to recover, HKMU admits that it is not taking any grotesque target of this year's revenue. "This year's full year performance will experience a significant decline compared to 2019 due to the pandemic and economic recession conditions," explained Jodi.
Just so you know that up to 2019, HKMU has posted a net income of up to IDR 1.3 trillion. Jodi said, HKMU is more focused on maintaining the stability of sales and operating costs in the next few months.
Understandably, up to the first semester of this year, HKMU's net income decreased 18.4% on an annual basis to IDR 461.42 billion. For the achievement of the third quarter of 2020, Jodi has not been able to comment. What is clear, HKMU will strive for efficiency so that this year's performance results can be optimal.
HKMU has also prepared three pillars of a business strategy to continue to grow despite the corona virus pandemic. Namely, strengthening the aluminum business lines, focusing on manufacturing segment, and the shift to value-added products ( value added ) to increase the margin.
The focus on the manufacturing business is reasonable because if it is broken down by segment, the HKMU manufacturing business in semester 1 of 2020 has increased, namely 30% yoy to Rp 240.39 billion. On the other hand, the trading business segment fell sharply 42% on an annual basis to Rp 241.01 billion.
In addition, the management of HK Metals Utama predicts that the aluminum market next year will remain stable with a slight increase after the PSBB easing. This increase in demand is expected to come from the retail market for housing and residential renovations.
In addition, management has also seen changes in spatial design trends and buildings since the Covid-19 outbreak, in which the shape of buildings in general is dominated by barriers to accommodate social distancing. Well, some components for the formation of room dividers and window architecture for air circulation use a lot of extruded aluminum.
This can benefit HKMU because HKMU customers are currently still dominated by the retail market, such as consumers of building shops, distributors, building applicators, and building facades, which are concentrated in Java and Sumatra. To be more detailed, aluminum sales contributed 53 percent to HK Metals Utama's total revenue in the first half of this year but fell 11.53 percent annually to Rp 245.89 billion.
Then, sales of galvalume, machinery and equipment, as well as PVC pipes fell 61.7%, 40.04% and 10.64% respectively on an annual basis to Rp 63.32 billion, Rp 17.37 billion and Rp 12. 62 billion in the first half of this year. On the other hand, sales of mild steel and stainless steel shot up 193.61% and 130.76%, respectively, to Rp 80.31 billion and Rp 35 billion in the first half of this year.
Goldenberg Mining Bauxite Operations in Iskenderun Turkey
Premiered Oct 6, 2020
Bauxite Ore Mining & Processing in Iskenderun Turkey. Its monohydrate type of Bauxite , Alumina and Metallurgical Grades Quality
Aluminium International Today September October 2020
Published on Sep 17, 2020
How a circular economy model will future proof the industry
By Paul McFadyen
Планов введения углеродного налога в РФ нет - Решетников
Москва. 21 октября. ИНТЕРФАКС - Россия пойдет по пути введения мягкого углеродного регулирования через внедрение системы мониторинга, планов введения углеродного налога нет, заявил глава Минэкономразвития Максим Решетников.
"Мы очень внимательно относимся к этим мерам. В нынешней экономической ситуации для нас очень важно не допустить инфляции издержек. Спрос стагнирует (есть ограничения по спросу - и по экспорту, и по внутреннему), и производителям некуда переложить дополнительные издержки. Поэтому мы сейчас жестко реагируем на любые предложения о повышении тарифов и попытки переложить это на потребителей - это суть нашей экономической политики. Регуляторная гильотина - тоже не что иное, как попытка снизить регуляторные издержки бизнеса. В этом плане углеродный налог сейчас совсем не к месту", - сказал Решетников "Интерфаксу", комментируя итоги прошедшего в понедельник заседания консультативного совета по иностранным инвестициям (КСИИ), в ходе которого активно обсуждалась тематика углеродного регулирования в РФ.
По его словам, иностранные инвесторы в ходе совета поднимали вопрос углеродного регулирования в РФ на фоне планов Евросоюза ввести дополнительные сборы на продукцию зарубежных производителей в связи с выбросами СО2, которые сопровождали производство.
"Мы идем мягким путем. Нужно создать нормальную систему мониторинга. Бизнесу, который готов добровольно в это идти, мы дадим все механизмы - чтобы они принесли в Европу условно сертификаты, которые будут признаны там "зелеными" и верифицированы, и через это там не предъявили бы эти требования", - пояснил Решетников.
По его мнению, требует корректировок и общая система мониторинга климатической повестки.
"Плюс в целом (важна) общая система мониторинга климатической повестки. Кто-то говорит, что наша экономика углородоемкая - на самом деле это не так. Если посмотрим, что было сделано за последние 20-25 лет в части модернизации энергетики, все программы ДПМ, развитие атомных, гидроэлектростанций, ВИЭ - у нас очень хороший баланс. Плюс в ЖКХ большой прогресс достигнут, выстроена система энергоемкости, мы видим, насколько мы продвинулись. И да, у нас еще есть вопросы, которыми надо заниматься. Кроме того, надо адекватно оценивать поглощающую способность наших лесов. С нашей точки зрения и с точки зрения очень многих экспертов, она неадекватно оценивается. Когда в Псковской области поглощающая способность лесов почему-то в разы меньше, чем в соседних странах - в том числе в Польше, - это ничем не объясняется", - отметил министр.
Вопрос о поддержке компаний, которые могут пострадать от планируемого Евросоюзом трансграничного углеродного налога, поднимается уже российским бизнесом, и власти ведут с ним диалог, но детали пока обсуждать сложно, сказал глава Минэкономразвития.
"Российские компании, ставят такой же вопрос, что могут пострадать от углеродного налога (который планирует ввести ЕС - ИФ). Но на это сложно реагировать, когда нет подробностей, механики реализации этого налога со стороны Еврокомиссии. Дождемся, когда он появится, тогда будем реагировать. У нас есть вопросы, насколько он будет соответствовать правилам ВТО, ждем конкретики от наших партнеров", - заключил он.
Еврокомиссия в рамках запланированной "зеленой сделки" с 2023 г. введет пограничный корректирующий механизм, который призван уравнять продукцию, произведенную с минимальными выбросами CO2, с товарами из других стран, где используются более дешевые технологии и недостаточно регулируются выбросы парниковых газов. Углеродный сбор может составить $30 за тонну выбросов CO2. Аналитики BCG ожидают, что он может быть введен уже в конце 2021 - начале 2022 года. По мнению экспертов, в наибольшей степени углеродный сбор затронет сектора, производящие продукты нефтепереработки и кокс (ключевой компонент для производства стали), а также горнодобывающую промышленность. Пассивность с введением жесткого углеродного законодательства и платы за выбросы может стоить российским экспортерам от $3 млрд до $6 млрд в год с установлением ЕС в 2023 г. налога на углеродоемкий импорт, заявлял недавно глава "Роснано" Анатолий Чубайс.
LME Week 2020: $1 trillion needed for key energy transition metals by 2035
21 October 2020
While the coronavirus pandemic has slowed climate change mitigation efforts this year, governments across the world are using stimulus packages to either kick-start or accelerate their decarbonisation journeys.
More than $1 trillion of investment will be needed in key energy transition metals - aluminium, cobalt, copper, nickel and lithium - over the next 15 years just to meet the growing demands of decarbonisation, according to Wood Mackenzie. This is almost double the figure invested over the previous 15 years.
“One can argue about both the pace and scale of the energy transition but the criticality of metals to its realisation is without question. Put simply, the energy transition starts and ends with metals. If you want to generate, transmit or store low/no-carbon energy you need aluminium, cobalt, copper, nickel and lithium.
“However, the fundamentals for several metals are poor and deteriorating, with prices for most well below long-term incentive levels. Understandably, investors are not totally convinced that the road to recovery is assured or of the sunlit uplands that the energy transition represents.
“Long-dated returns from investing in mining and processing sit uneasily against the need for certainty of regular dividend payments or the near-term gains that can be made from other popular asset classes. This severely hampers the ability of boards to undertake the necessary long-term decisions needed to develop the supply that high-growth energy transition related commodities demand.
“This poses fundamental questions – and not just for the consumers of these metals who will rely on predictable, affordable and, for some, ethically sourced supply. If producers cannot meet the most basic of consumers’ needs, a time will surely come when they find ways to innovate out such unreliable raw components from their supply chain,” said Julian Kettle, Wood Mackenzie Vice Chairman of Metals and Mining.
Producers are becoming increasingly carbon conscious, with many setting targets for net zero carbon. Several high-profile majors have offloaded their high carbon assets and/or acquired low carbon replacements. “It isn’t just about portfolio balance. The green agenda will have a profound impact on the way these companies extract and refine metals, with lower carbon operations an increasing priority.
“This, in part, explains the resurgence of interest in the collection and use of scrap. Increasing our reliance on secondary metal will help to meet sustainability goals, reduce capital demands and decrease the carbon footprint of production.
“However, scrap collection and sorting remain problematic and secondary metal cannot be used in several applications driving the energy transition, such as electricity cabling and wiring that require primary metal.
“Green energy procurement and generation is at the fore and portfolio optimisation is now a must-have on any board agenda. It feels like the tipping point is imminent. We expect carbon to become a non-negotiable component of any AGM - as safety did in the 1990s,” added Kettle.
The industry finds itself at the same crossroads it has been at before, says Wood Mackenzie. The short-term outlook is generally poor with deteriorating market fundamentals, albeit as a result of a global pandemic rather than overexuberant investment in supply.
“Can producers position themselves for investment in new supply, not just to offset mine depletion but also for growth in conventional and energy transition markets? Can they decarbonise and navigate the increasingly complex minefield of the ESG landscape and deliver the returns expected?
“Miners are adept at juggling conflicting demands. The question is whether they are adept enough to manage this perfect storm of problems and opportunities,” said Kettle.
CSSC : Request for an addendum to the Opinion on Aluminium
Wednesday, October 21, 2020
In March 2020, the CSSC (Scientific Committee on Consumer Safety) published its final Opinion on the safety of aluminium used in cosmetic products. Following an mistake recently identified in the submission dossier, the European Commission has just requested an addendum to this Opinion, to re-evaluate the safe percentage in lipsticks. The Scientific Committee accepted this mandate by written procedure on 16 October 2020.
Vedanta to shut Odisha refinery
The Vedanta group said on Tuesday it will go ahead with its plan to temporarily suspend operations at its 1-million-tonne alumina refinery at Odisha’s Lanjigarh from Wednesday due to a shortage of bauxite, a key raw material for producing alumina. HT reports.
Updated: Dec 04, 2012, 22:25 IST
The Vedanta group said on Tuesday it will go ahead with its plan to temporarily suspend operations at its 1-million-tonne alumina refinery at Odisha’s Lanjigarh from Wednesday due to a shortage of bauxite, a key raw material for producing alumina.
The move will impact about 7,000 jobs in the state. The firm had given a closure notice to the state government three months ago citing bauxite shortage as the primary reason.
“We are yet to get any guidance on bauxite availability from the Odisha government,” said a senior company official. “We had said in the past that we may have to temporarily suspend operations at the (Lanjigarh) refinery) from December 5. Since bauxite is unvailable, the plant has become unsustainable.”
Vedanta Aluminium Ltd (VAL) gave a 3-month notice in September to the state government that it would shut the factory in December if bauxite is not made available.
The firm reasoned that it had been running the plant at lower capacity, incurring losses. It had shut the refinery for 9 days in October.
VAL had invested Rs. 50,000 crore in the refinery along with an aluminium smelter of 1.5 mtpa and a captive power plant.
The refinery was meant to use high-grade bauxite from Odisha’s mines and runs on environment-friendly low pressure and low temperature technology.
Alumina is the intermediate product to produce aluminium. Three tonnes of bauxite is required to produce one tonne of alumina and half a tonne of aluminium can be extracted from one tonne of alumina.
At 1.7 billion tonnes, Odisha has two-third of India’s bauxite reserves.
“Raw material availability is the biggest incentive for setting up a factory in a particular location,” the official said. “However if that is not there, then it becomes difficult.”
Tackling the carbon emission challenge
21 OCTOBER 2020
Gerald Rebitzer, sustainability director at Amcor, explores how the climate crisis and the pressing need for carbon reduction should take a front seat in FMCG packaging sustainability strategies.
In recent years, we have seen a strong industry focus on circularity and packaging waste, which has somewhat eclipsed the climate crisis. Despite repeated political declarations, there was a gap between the cited goals and reality. But carbon is again moving to the forefront of the debate. The European Commission set the goal to be carbon neutral by 2050, and even China announced that it would cut its net carbon emissions to zero within 40 years.
Short-term investment, long-term gains
The EU’s announcement of the New Green Deal had a positive impact, as it started competition in the positive sense. Addressing the climate crisis requires some short-term infrastructure investment. But investment in carbon reduction can give companies a competitive edge in the long term, similar to what happened with Tesla’s electric cars. They didn’t make a profit for a long time, but now the technology is really catching on and other manufacturers have to play catch-up.
There is a growing realization that we need to act now on the climate crisis, and I expect this to balance out the discussions about ‘good’ or ‘bad’ packaging materials. The real key is to improve packaging efficiency. Functionality is important. If weight can be reduced while maintaining functionality, that is even better; weight is even more important than what type of material the packaging is made from. Bearing in mind that one-third of food produced is wasted, it becomes clear what savings could be made in that area. Reducing food waste is crucial. Packaging should be part of a solution, and should be fed back into the circle, whether it is reused or recycled. Of course, we should furthermore avoid other negative impacts such as littering and ocean waste.
Recyclability vs energy efficiency – from gas guzzler to electric
Changes that are happening in other industries can serve as a model for the packaging industry. As an analogy, when comparing a Ford Thunderbird from the 1970s, which consumed a lot of petrol, with a much more efficient modern hybrid or electric car today, the modern car obviously has a much lower carbon footprint, but it also has some challenges in terms of recyclability, especially when it comes to the battery, for which there is currently no recycling infrastructure available. On the other hand, the Ford Thunderbird is very easy to recycle as it is one big piece of steel, but would you really want to go back to the old car and lose all the efficiency benefits?
At the end of the day it is about bringing the circular economy into the modern world in terms of product design and recycling infrastructure. It is indeed possible to develop monomaterial solutions that are as efficient as multimaterial solutions and also have a lower carbon footprint, as flexible monomaterial solutions are based on PE or PP, the polymers with the lowest carbon footprint. By replacing PET or aluminium foil, you already lower your carbon footprint, and if this is complemented with a suitable recycling infrastructure, the carbon footprint is reduced even further.
At Amcor, we are able to manufacture monomaterial solutions for the most demanding mainstream applications, not just niche products. Amcor’s R&D team comprises around 1000 people, and they are hard at work on roadmaps to convert structures into monomaterials that can be recycled in existing recycling systems and that are also future proof. We innovate to bring products into the market that meet barrier requirements as well as processing and filling requirements in demanding applications that support both mechanical and chemical recycling.
Unilever launches its largest refill trial in Europe
21 OCTOBER 2020
Unilever has launched refill trials across seven of its most well-known brands at Asda’s Middleton store in the UK, representing its biggest refill and reuse trial in Europe.
Unilever is a lead partner in the trial, and has provided seven of its household-name brands including Persil, PG Tips, Radox, Cif, Simple, Pukka, and Alberto Balsam. Trialling three different refill formats, this is the largest of its kind for Unilever in Europe, and the company hopes that the project will help it to understand what works best for consumers in a retail environment.
Radox shower gel, Simple liquid handwash and Alberto Balsam shampoo and conditioner, along with Persil laundry liquid are dispensed in reusable aluminium or stainless-steel bottles via three machines using the “Return, Refill, Repeat” premise.
First-time shoppers are provided with a bottle, while returning shoppers can reuse their existing bottle. Once filled, shoppers add a printed label to the bottle and take it to checkout as usual.
Each bottle has a unique QR code, a feature which enables traceability, allowing Unilever to track the full buy, use, and refill process and gain better insight into the model. Together, Unilever predicts that its three new refill stations could save the equivalent of 30,000 plastic water bottles per year in just one store.
Elsewhere in the trial store, shoppers have access to an entire bay dedicated to concentrated refill for sprays, which reportedly enable them to use a single Cif spray bottle for life. According to Unilever, an entire fixture of concentrated spray cleaners across all Asda stores could save the equivalent of 990 tonnes of plastic every year.
Unilever tea brands PG Tips and Pukka are also available through self-serve containers or hoppers for loose tea and tongs to self-dispense “fully biodegradable” teabags. Shoppers have the option of taking their own reusable container into the store or buying one there. Once their container is full, they take it to the weighing station where a label is printed ready for payment at the checkout.
Sebastian Munden, executive vice president of Unilever UK & Ireland, comments: “I am very excited by the potential to test and learn from this fantastic partnership with Asda. It's a great opportunity for us to find out, across seven of our leading brands, just how shoppers respond to using refillable and reusable packaging in-store.
“We are all committed to driving lasting change when it comes to plastic, but to do so we must create scalable solutions and make it as easy as possible for people to make sustainable choices. On our journey to halving our use of virgin plastic by 2025, we will have to be bold and totally rethink products and packaging, and we will only do that by testing a range of solutions with shoppers in real-life conditions."
Bechtel wins engineering consultant contract for Egyptalum's 7th production line
Published on Wed, 21 Oct 2020
The Misr Aluminum Company Egyptalum has awarded the US-based company Bechtel an engineering consultant contract for the former's seventh production line project. The project aims to increase Egyptalum's production of aluminium, with Bechtel highly qualified in managing aluminium smelters projects. The company will start implementing the project before the end of 2020. In a two stage process, Egyptalum aims to increase its production of primary aluminium by 250,000 tonnes per year using modern technology.
Egyptalum is a subsidiary of the Metallurgical Industries Holding Company, which itself falls under the Ministry of Public Enterprises Sector's umbrella. It revealed that losses of about EGP 994 million in FY 2019/20, compared to a profit of about EGP 571 million in FY 2018/19. Egyptalum said that it achieved revenues of EGP 7.2 billion in FY 2019/20, compared to EGP 12.1 billion in FY 2018/19.
It’s a material whirl!
20 OCTOBER 2020
Aerospace Manufacturing hears how pulse plasma nitriding can improve aerospace surface treatment, wear resistance, fatigue and material performance.
When aerospace manufacturers seek to improve the reliability and durability of common materials such as aluminium, stainless steel, and titanium, advanced surface treatment case-hardening options are significantly enhancing wear resistance, fatigue and material performance.
Sustainability in packaging: Inside the minds of US consumers
October 21, 2020 | Article
We can identify several similar trends in other food and nonfood segments:
Produce (fresh fruit, vegetables, fresh meat). Consumers want more recyclable or compostable films and more paper- and board-based packaging.
Beverages. The most important request is for plastic bottles that are more recyclable or entirely made from recycled content. In this segment, consumers also ask for more metal and glass packaging.
Packaged dry food. This segment similarly has a high level of interest in both recyclable and recycled plastic packaging, as well as in fiber-based packaging.
Dairy products. We found strong demand for plastic packaging (both flexible and rigid) that is either fully recyclable or compostable or includes recycled content.
Frozen food. US consumers want plastics with more recycled content.
Pet food. US consumers who have a preference want much more paper-based packaging.
Household products. As with beverages, US consumers ask for plastic packaging with more recycled content and high recyclability. They also want more glass packaging.
How an Australian resources company makes ESG a priority
October 22, 2020 | Interview
Karen Wood, chair of South32, talks about what makes the company’s purpose and strategy resilient in unpredictable times.
The consequences of risk, from pandemics to climate change, dominate the business agenda. They also underscore the importance for business leaders to strengthen their companies’ environmental, social, and governance (ESG) propositions, says Karen Wood, chair of the board of South32, a diversified resources company headquartered in Australia that does business in around 60 countries. Before assuming the role of chair, Wood served as independent nonexecutive director and part of the remuneration, sustainability, and nomination and governance committees for South32. Prior to that, she was part of the executive leadership team at BHP from 2001 to 2014.
Trade review: Alumina anticipates calm Q4 after bumpy Jul-Sep
22 Oct 2020 | 03:30 UTC Sydney
Author Joanna Lim
Editor Norazlina Juma'at
Q3 turbulence upends expectations
Imbalances in Brazil, China
Nervous financial markets underscore uncertainty
This is Part 4 of 5 in the S&P Global Platts Metals Trade Review series, where we dig through datasets and digest some of the key trends in metallurgical coal, iron ore, steel, scrap and alumina. We also explore what the next few months could bring, from supply and demand shifts, to new arbitrages, and to quality spread fluctuations.
After a particularly volatile third-quarter, the alumina market may see less dramatic price swings in the final quarter of this year, a number of market participants have said.
The erratic swings of Q3 were due to a combination of events in the physical and futures markets, as well as the cascading impact from the volatility in the wider financial markets as the COVID-19 pandemic sank the global economy deeper into recession.
UNPLANNED RUN CUT IN BRAZIL
An unplanned two-month curtailment at the Alunorte alumina refinery in Brazil in August and September created severe supply concerns across the globe, propelling prices higher.
It is the world's largest alumina refinery, and typically exports sizable volumes to Norway, Iceland and Canada. It is also the sole alumina supplier of the 450,000 mt/year Albras primary aluminum smelter in Brazil.
The plant's associated bauxite mine needed emergency repairs to its pipeline, during which the mine was idled and the refinery's output slashed to around 40% of its 6.3 million mt/year capacity, from 90%.
According to S&P Global Platts estimates, Alunorte lost about 283,500 mt/month of alumina output when the curtailment began on Aug. 18.
CHINESE IMBALANCE LINGERS
Another source of volatility in Q3 was China's mismatched expansion of both its smelting and refining capacities, with market perceptions shifting constantly on whether the country was producing enough alumina to match its aggressive growth in aluminum production.
China's alumina deficit during Q2 had caused domestic margins to swell, fueling anticipation that the country's refining growth would catch up to increased consumption rates in Q3. However, as it turned out, China was not able to balance out its alumina deficit.
The country's alumina output growth continued to lag aluminum in July, and although the growth rate did accelerate in August, it was not enough to level the imbalance that began in Q2.
Official statistics indicated that between January and August, China's metal output climbed more than 2% year on year to 24.3 million mt, while alumina output fell nearly 4% year on year to 47.69 million mt.
China is unique in that it has an unusually large number of plants -- around 50 alumina refineries and 140 primary aluminum smelters -- nearly all of which operate in an opaque environment, where plant restarts, run cuts and closures often take place quietly.
In comparison, Australia, the world's largest net exporter of alumina, is home to five refineries, while the Middle East, the world's largest net importer of alumina, operates just six aluminum smelters, excluding Iran.
Given its magnitude, market participants often say it can be difficult to keep on top of China's alumina demand-supply balance on a real time basis. Market participants often supplement their own research and analysis with official output data compiled monthly by China's National Bureau of Statistics. However, these are typically released nearly two months after the fact, so market participants find themselves having to adjust their trading positions retroactively.
NERVOUS FINANCIAL MARKETS UNDERSCORE UNCERTAINTY
Turbulence in the global financial markets during Q3 added further uncertainty in the alumina market. Stock markets worldwide suffered dramatic falls during the quarter, and the US dollar weakened substantially, which had a flow on effect of raising base metal prices, including that of aluminum and alumina.
Ample funds were flowing into the base metals complex, as volatile equity markets and low confidence prompted financial investors to diversify their portfolios.
The ensuing upward push in aluminum prices offered global smelters some much-needed margin relief, and enabled them to maintain consistent production rates in the face of the significant decline in downstream demand caused by the COVID-19 pandemic.
Not only did aluminum prices soar, the LME price curve also developed a remarkably wide contango during August and September, with the cash and three-month differential averaging nearly $40/mt. It has since contracted to $17/mt on Oct. 14.
Aluminum cash and carry trades were prevalent as investment banks and trading houses were incentivized to buy metal, store it at a low cost due to low interest rates, roll them over and hedge.
The surge in metal prices boosted smelting margins, with the deep contango extending the gains further, both of which helped propel alumina prices higher.
Investor demand helped compensate for the slump in the pandemic-induced downstream demand, and enabled smelters to maintain consistent production despite softer consumer demand.
The CEO of the Aluminium Association of Canada, Jean Simard, called it the 'aluminum paradox'. It was a paradox that smelters were running hard, while the global economy was collapsing.
"This is what I call the aluminum paradox because, while you are allowed to maintain operations as part of the aluminum response industry, your market is in total erosion, so you are losing bits and pieces and larger volumes of sales as we move through the days and weeks," Simard told Platts in an interview in June.
A CALMER Q4 ANTICIPATED
Market participants expect the price of alumina to be rangebound in the coming months, given the demand-supply dynamic.
High global consumption rates are likely to support prices, and at the same time there may not be much scope for drastic increases either, as output continues to creep, they said.
The Alunorte refinery is in the process of returning to normal rates. Shareholder Norsk Hydro announced on Oct. 9 that the pipeline repairs were completed and the refinery expected to return to pre-incident rates within two weeks.
Alcoa announced on Oct. 9 that it would close its 228,000 mt/year San Ciprian aluminum smelter in Spain by Q1 2021, but will continue to operate the associated alumina refinery, potentially freeing up about half a million mt/year of alumina.
World primary aluminium production declines 1.81% M-o-M in September 2020, but total output in Jan-Sept up by 2.1%
The latest data released by the International Aluminium Institute for September 2020 shows the world primary aluminium production stood at 5.42 million tonnes, down by 1.81 per cent from 5.52 million tonnes in August 2020. However, on a year-on-year basis, the output grew by 4.03 per cent from 5.21 million tonnes.
Total primary aluminium production from January to September 2020 came in at 48.61 million tonnes versus 47.61 million tonnes during the same period last year. This means the world primary aluminium production during the first nine months of 2020 stood higher by 1 million tonnes or 2.1 per cent year-on-year.
In China, primary aluminium production in September 2020 stood at 3.15 million tonnes, lower by 1 per cent than 3.18 million tonnes in August 2020 but 8.25 per cent higher than 2.91 million tonnes in September 2019.
During January-September 2020, primary aluminium production in China totalled 27.71 million tonnes, up by 3.36 per cent from 26.82 million tonnes.
Europe produced 608,000 tonnes of primary aluminium in September 2020, 3.34 per cent lower than 629,000 tonnes in August 2020 and 1.94 per cent than 620,000 tonnes in September 2019. Total production during January-September 2020 stood at 5.60 million tonnes compared with 5.68 million tonnes during the same period last year.
In the Middle East, primary aluminium production in September 2020 came in at 465,000 tonnes, down by 3.12 per cent from 480,000 tonnes in the month earlier and 2.71 per cent from 478,000 tonnes a year ago. Total production in GCC in the first nine months of the year stood at 4.35 million tonnes.
In Asia (ex-China), aluminium production in September 2020 came in at 348,000 tonnes, slightly down from 349,000 tonnes in August 2020. On a year-on-year comparison, the production was lower by 3.60 per cent than 361,000 tonnes. Total production during January-September 2020 came in at 3.08 million tonnes.
22 October 2020
Risk sentiment improved yesterday, fuelled by hopes of an imminent deal on a US stimulus package, while positive signs re-emerge on Brexit talks, with reports that there is an aim for a deal by mid-November. A weaker USD has helped with the rally in the metal complex, with copper breaking the US$7,000/tonne mark at one stage, levels last seen in June 2018.
There is little fundamentally that is dictating direction for metal prices. Although LME aluminium inventories have started to surge, with a 64kt increase coming predominantly from Asia. As expected, this is likely the result of recent spread tightness in part of the forward curve, which has forced deliveries. However a sizeable load-in, together with more evidence of rising production from China meant that the aluminium rally was more muted compared to the broader move in metal markets yesterday. Elsewhere, Century Aluminium is said to close its Mt Holly aluminium smelter by the end of this year if they cannot secure a competitively priced power arrangement. This follows the recent decision by Alcoa to close its Spanish based San Ciprian aluminium smelter. Such cases could further drive further divergence in the aluminium industry, where China capacity has been continually growing, whilst the rest of world, particularly from some major developed economies, continue to see a decline in primary smelting capacity.