Primary Aluminium News - General

UPDATE: Top 5 Primary Aluminium Producers in the World

AL Circle

The global aluminium market ended in a marginal deficit of 970,000 tonnes during the first eleven months of 2016, revealed data published in the latest report of the World Bureau of Metal Statistics (WBMS). In 2015, the deficit amount was recorded at 551,000 tonnes. The stocks of the metal, at the end of the review period, stood at 2,644 kilo tonnes. The total aluminium demand grew marginally by 68,000 tonnes to total 53.58 million tonnes during January to February 2016. China, as expected, led the demand engine, thanks to its ever expanding end user markets. Aluminium demand in the EU-28 also rose by 409 kilo tonnes year-on-year during the initial eleven months of 2016.

Based on the latest available aluminium production capacity data, here we provide the list of top 5 primary aluminium producers of the world. The list is dynamic and is subject to change under various macro-economic conditions of the global industry.

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1. China Hongqiao

China Hongqiao, right now, is the largest aluminium smelter in the world. With a combined annual capacity of 3.61 million tonnes, the Shandong province-based aluminium producer outpaced state-backed Aluminium Corporation of China and the erstwhile largest UC Rusal in a space of only two years. The company expanded its smelting capacity by 29.8 per cent to 5.89 million tonnes in the 12 months to June 30, and by the end of the last year, it had plans to further expand it to 6.5 million tonnes. However, in October, it was ordered to stop construction of its 1.32 million tonne-a-year aluminium smelting plant as it allegedly failed to obtain environmental protection approvals for the project.

For the six months ended 30 June 2016, China Hongqiao’s total revenues from aluminium business stood at RMB 25.3 million, up 13 per cent from the previous year. Following the success in establishing the world’s first full series 600KA aluminium production line in 2015, the Group continues to put more efforts in technological innovation, production equipment upgrade and environmental protection, thereby riveting its position as the lowest-cost aluminium producer in the entire industry.

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2. UC Rusal

The largest aluminium producing company of the Russian Federation registered a total aluminium production of 3,685 thousand tonnes (+1.1 per cent YoY) of aluminium in the year ended 31st December 2016. Aluminium production in fourth quarter of 2016 totalled 930 thousand tonnes (+1.0% QoQ), with its Siberian smelters representing 94 per cent of total aluminium output.

In the last 12-month period, aluminium sales volumes totaled 3,818 thousand tonnes (+4.9 per cent YoY). The increase was largely attributable to the additional volumes of the Boguchansky smelter..

Aluminium production volumes from other smelters registered in the same period are as follows:

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3. Rio Tinto

As per the mining giant’s recently published full-year 2016 financial results, record aluminium production was reported at all its ten smelters. Total aluminium production grew 10 per cent YoY to total at 3.646 million tonnes vis-à-vis 3.322 million tonnes in 2015. The company invested significantly in modernisation and expansion of its Kitimat smelter and recovered a large sum through sale of its Lochaber smelter assets.

Rio Tinto’s underlying EBITDA from the Aluminium segment for the year stood at US$8,526 million, up 11 per cent from US$7,675 million in 2015. Underlying earnings from the segment totalled US$4,611 million, up 17 per cent from US$3,940 million in 2015. Gross revenue from the primary metal, however, was down at US$4,913 million when compared to US$4931 million a year earlier.

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4. Chalco

China’s state-backed producer Aluminium Corporation of China Limited used to be the largest refined metal maker until China Hongqiao usurped it capacity-wise two years ago. Its production output, as per 2015 data, stands at 3.31 million tonnes. The company produces high purity aluminium (and other advanced processing products) at its smelters owned by group companies Chalco Shandong, Guizhou branch and Baotou Aluminum Co Ltd.

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5. Alcoa

Alcoa’s fourth quarter 2016 result (published in January 2017) shows the company produced a total volume of 2,423 kilo metric tonnes or 2.43 million tonnes aluminium in 2016, down 13.8 per cent from 2.81 million tonnes in 2015. Since launching as an independent company on November 1, 2016, the company has increased its cash position by $198 million and closed the fourth quarter 2016 with a cash balance of $853 million.

Alcoa has been paring down its production over the last four years. In fiscal 2016, the company produced 2.42 million tonnes of aluminium down from 2.81 million tonnes in 2015.

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       Source: Market Realist

Although aluminium producers like Rio Tinto and Chalco have been ramping up their production, Alcoa and other US-based aluminium producers such as Century Aluminum have been curtailing their high-cost capacities to survive the prolonged slump in commodity prices. Alcoa has been quite proactive in managing its portfolio to preserve the company’s profitability amid lower commodity prices.

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