AL Circle Analysis: Aluminium’s recycling economics, trade walls and carbon rules converge
The story of the aluminium industry is starting a chapter wherein scrap availability, recycling technology, trade policy, carbon costs and demand growth are becoming increasingly interconnected. From the US and Canada to Europe, India, New Zealand and China, recent developments show that the global aluminium supply chain is being reshaped on several fronts at once. These developments point to a changing aluminium business model: access to metal alone may no longer be enough. Quality of recycled feedstock, domestic processing capacity, carbon intensity, trade exposure and the ability to meet increasingly specific customer requirements could become equally important competitive factors. Join the fourth edition of the webinar “Hedging for recyclers - Become an expert in 6 hours” by Jorge...
Europe holds 10% of global aluminium extrusion demand, supported by Germany’s Constellium, France’s Hydro Extrusions & Italy’s Metra
Across Europe, aluminium extrusion has become closely woven into some of the region’s biggest industrial and construction markets. From automotive and transport to buildings and industrial applications, extruded profiles are finding demand across a wide range of sectors. This is reflected in Europe’s position in the global market: the region accounted for 12 per cent of global aluminium extrusion capacity, making it the second-largest regional contributor after China. At the same time, Europe represented 10 per cent of global aluminium extrusion usage, out of total global usage of 35.35 million tonnes . With production capacity and usage shares relatively close, Europe’s extrusion capacity and consumption are broadly at par. If we break down Europe’s 10 per cent share of global aluminium...
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Aluminium to harden on hopes of oil output freeze
Aluminium is likely to get costlier in the coming days due to the expected freeze on oil output to be clamped by the Organization of Petroleum Exporting Countries at its meeting with non-OPEC members on April 17. The output freeze will spur price increase because energy accounts for about 30 per cent of aluminium's production cost. Aluminium has been trading above INR 97-98 levels in Indian market over the past few weeks as oil prices have been inching higher. A rally in oil prices is likely to push the cost of production higher for aluminium prices. "However, the sustainability of oil prices above $42-43 a barrel is still doubtful," said Himanshu Gupta, senior market strategist at Karvy Commodities Broking. "Aluminium prices are expected to test INR 110-111 per kg in the medium term...
Tiwai Point smelter production decision hinges on long-awaited grid cost-sharing recommendations
A long-awaited recommendation on how the cost of the national electricity grid in New Zealand should be shared in future is due on May 17. The NZ Electricity Authority says it will release its transmission pricing methodology paper and run an eight-week consultation. The issue has been running for years without resolution and revolves around whether South Island electricity generators and consumers pay too much for access to the grid, especially since $2 billion of upgrades over the past five years has delivered a significant improvement in security of supply for North Island consumers. Whatever the outcome, there are likely to be economic and political consequences. The Rio Tinto-controlled aluminium smelter at Tiwai Point regards the final decision on grid costs as an important input...
Nalco eyes JV route for 5-lakh tonne aluminium plant in Iran
The state-owned aluminium maker Nalco is considering setting up a 5-lakh tonne per annum aluminium plant in Iran through a joint venture (JV). Nalco CMD T K Chand, who was part of the delegation led by Petroleum Minister Dharmendra Pradhan to the Islamic country, met a top Iranian official yesterday and discussed the feasibility of setting up such a plant in the Chabahar Free Trade Zone (FTZ), a senior official said. "Chand met Iran's Mines and Mining Industries Development and Renovation Organisation head Mehdi Karbasian in Tehran over the proposed JV for setting up the plant, which includes a smelter and a gas-based power plant," he added. The discussions also touched on Nalco's interest to further expand its presence in Iran through more co-operation in bauxite mining and aluminum...
Tasmanian bauxite miner in maiden sale
Tasmania's newest miner has locked in its maiden shipment after losing $1.04 million last year. Australian Bauxite Limited has had its first 40,000 tonne shipment from its Bald Hill Mine, near Campbell Town, ready since early December. However, the price crashed and a sale deal did not proceed. On Tuesday, it announced a maiden shipment, with an initial cargo of 5000 tonnes to go in the last week of April. "The customer is seeking a second, larger shipment of 30,000 to 40,000 tonnes once stockpile sites in the receiving port are approved," the company told the ASX. "This is planned to occur within two months." It said the sale price was ‘’satisfactorily profitable,’’ but the amount was ‘’commercial in confidence’’. Australian Bauxite chairman and former Tasmanian premier Paul Lennon...
Alufoil Trophy 2016 winners set the standard for originality and performance
Once again the Alufoil Trophy competition has underlined the versatility and practical advantages of aluminium foil to create highly original new developments as well as fresh ideas to enhance existing products. The aluminium foil sector’s annual premier awards competition, the Alufoil Trophy brings out the best in both multinational and specialist foil manufacturers and converters. This year is no exception with 65 entries across the five major categories producing 10 outstanding winners, plus an Overall Excellence winner, which scored extremely high marks in all categories. “The ability to meet environmental and sustainability targets without losing any degree of performance or quality is very clearly demonstrated. In addition the technical innovations, to solve complex problems or meet...
Alcoa Q1 2016 Results: All Arconic segments on track to deliver $650 mln productivity savings
Lightweight metals major Alcoa announced yesterday first quarter 2016 results reflecting solid performance. During the period under review, downstream and value-added business segments of Alcoa, namely, Global Rolled Products (GRP), Engineered Products and Solutions (EPS) and Transportation and Construction Solutions (TCS) reported combined revenue of $3.3 billion. These three business divisions, which would be merged to form the innovation and technology-driven Arconic company after Alcoa's separation, reported after-tax operating income (ATOI) of $269 million, adjusted EBITDA of $537 million and adjusted EBITDA margin of 16.4 per cent. ATOI and adjusted EBITDA increased 8 and 7 per cent, respectively, year-over-year. The combined segments also generated $179 million in productivity as...
ISRI Convention discusses increased use of aluminium and its impact on recycling
The recently concluded Institute of Scrap Recycling Industries (ISRI) Convention and Exposition held fruitful discussions on the increased usage of aluminium by automotive industry and its impact on recycling. The panelists highlighted on the various light weighting benefits and emphasized on the need to create more capacities to meet rising demand. According to speakers of the session titled “The Increased Use of Aluminium in the Automotive Industry and its Impact on Recycling”, the usage of aluminium has increased three-folds since mid-1980’s. The use of aluminium in vehicles offers lightweighting benefits and closed loop capabilities. The aluminium usage in vehicles is expected to grow further. Original Equipment Manufacturers (OEMs) must work closely with suppliers to ensure that...
Fears grow for future of Rio Tinto jobs in Lochaber aluminium smelter
Reports that a company with no connection to the aluminium industry is interested in acquiring the Rio Tinto aluminium smelter at Fort William have raised job fears. The smelter employs 150 people and Rio Tinto is currently carrying out “a strategic review” of all its assets in Lochaber. Highland Council has stressed the company’s importance as a major employer in the local economy, pointing out that it is seven times as significant to Lochaber as the Tata Steel works is to Lanarkshire. Scottish Labour’s deputy leader, Alex Rowley, joined party candidate for Skye, Lochaber and Badenoch, Linda Stewart, and Fort William and Ardnamurchan councillor, Brian Murphy, to meet union members on Saturday this week.
Aluminium futures gain on spot demand
Aluminium prices in Indian market edged up by 40 paise to INR 101.30 per kg in futures trade today as participants enlarged positions, supported by a strong spot demand in the physical market. In futures trading at the Multi Commodity Exchange, aluminium for delivery in May inched up by 40 paise, or 0.40 per cent, to INR 101.30 per kg, in a business turnover of two lots. Likewise, the metal for delivery in current month traded higher by 30 paise, or 0.30 per cent, to INR 100 per kg in 187 lots. Traders said increased domestic demand from consuming industries at the spot markets, helped aluminium futures to trade higher.
China's restarted and new aluminium capacity unlikely to contribute much to H1 output
Continuous price recovery has triggered restart of idled capacity and commissioning of new capacity in Chinese aluminium market. How much output will those capacities contribute in the first half of this year?- SMM doubts. SMM expects restarted capacity unlikely to exceed 300,000-tpy in the first half of this year, contributed mainly by smelters with power tariff subsidies and scale effect. These restarted capacities will contribute less than 50,000 tonnes to output in H1, though. High restart cost and tight bank lending will deter many smelters from following suit. Besides, rising coal and alumina prices will also act as constraints, SMM aluminium analyst Liu Xiaolei explained. As for new capacity, the figure is unlikely to surpass 500,000-tpy in Q2, with output contribution estimated at...
Vedanta Ltd announces Q4 and Full-Year 2016 production results
Vedanta Limited announced yesterday production results for the fourth quarter and full year ended 31 March 2016. In Q4 FY2016, aluminium production was 226 kt at Jharsuguda and Korba. Q4 FY2016 aluminium production highlights: On 27th January, the company received approval from the regulatory authorities (Orissa Electricity Regulatory Commission) to use the power generated from three units of the 2,400 MW (4 x 600 MW) Jharsuguda power plant for captive use which would enable full ramp-up of the 1.25 mtpa Jharsuguda-II smelter. Consequently, it has commenced ramp-up of the first pot line of 312.5kt from 1 April 2016. The 325 kt Korba-II smelter produced 19,200 tonnes during Q4 FY2016 with 84 pots operational. Pre-commissioning activities have commenced for further ramp up from the end of...
Vedanta's FY16 alumina production drops marginally
Vedanta Limited announced yesterday production results of fourth quarter and full year ended 31 March 2016. In Q4 FY2016, Lanjigarh alumina refinery operated at a single stream and produced 211,400 tonnes. Vedanta Ltd has received approvals for expansion of the Lanjigarh refinery to 4 mtpa, which will be ramped up in phases on further visibility on bauxite sources. During FY2016, alumina production was marginally lower at 970,900, due to the single-stream operations at the refinery. Vedanta had set up the refinery in 2007, keeping an eye on the bauxite mine at Niyamagiri, spread over Kalahandi and Rayagada districts. In 2004, Vedanta had entered into a joint venture with state-owned Odisha Mining Corporation (OMC), the original lessee of Niyamagiri deposits for mining and sourcing of...
Altech Chemicals capital raising to be used for high purity alumina plant design
Altech Chemicals Ltd has banked $744,000 in a Share Purchase Plan and $2 million in total funds raised toward finalising the detailed design of Altech’s proposed high purity alumina (HPA) plant in Johor, Malaysia. Altech is aiming to become a leading supplier of 99.99 per cent (4N) high purity alumina (HPA) (Al2O3). Altech is unique in that it uses a process to convert aluminous clay, sourced from its own quarry in Western Australia to HPA in a simple, highly cost effective process with operating costs a fraction of its larger, more established peers. A recent Bankable Feasibility Study for the development of a 4,000 tonne per annum HPA processing plant at Johor provided robust financial outcomes from development of the project including a pre-tax NPV of US$358 million (previously US$326...
Pahang law enforcement agencies extend bauxite checkpoint operations
Pahang law enforcement agencies along with Pahang police will continue with operations on bauxite mining at nine checkpoints in line with the extension of the mining moratorium period. State police chief Sharifuddin Ab Ghani said the checkpoints which operated 24 hours a day were to ensure that only lorries with bauxite from the existing storage facilities with export permit were allowed to go to the port. "The checkpoint operations will also involve other law enforcement agencies such as the Land and Mines Department, Road Transport Department and the Land Public Transport Commission," he said when contacted in Kuantan on Monday this week. Sharifuddin said the locations of the checkpoints were along the main route to the port, namely Bukit Kuantan, Tanjung Pasir, Kampung Padang, Taman...
Rio Tinto warns of job cuts at Weipa bauxite operations
Mining giant Rio Tinto is flagging job cuts at its Weipa bauxite operations. The company has not revealed exact numbers yet, but has written to all personnel, warning them of job losses as part of a review to cut costs because of falling aluminium prices and competition. The operation employs 1400 staff and contractors. It is not expected to impact the separate $2.6 billion South of Embley expansion, now known as Amrun. Construction has started on the extension with up to 1100 people to be employed at its peak over three years. Many of the current staff are expected to move to the new operation. Weipa bauxite operations general manager Gareth Manderson told staff they “need to transform our business during 2016 in order to build resilience irrespective of market cycle”. “The work we...
India launches space technology to tackle illegal mining of bauxite and other minerals
Rising levels of illegal mining in India is seeing the government implement space technologies in an effort combat the issue. Each state was also asked to gather information on past illegal mining activities of minerals like bauxite and other metal ores, and methods used to check them. Balvinder Kumar, India’s mines secretary, said, mapping of mines by satellite will begin with major metals such as gold and iron ore, gradually expanding to include sand and limestone – where the problem is more prevalent. In September 2015 Indian Prime Minister Narendra Modi stressed the use of space technology to prevent illegal mining activities. “Once fully implemented, the move will bring about transformation in the Indian mining industry. We have identified large chunks of illegal mining in many...
US aluminium scrap recovery totaled 8,244 mln lb in 2015, up 2.8% over 2014
The U.S. aluminium industry purchased an estimated 746 million pounds of aluminium scrap during January 2016, according to aluminium recycling statistics published by the U.S. Geological Survey, Department of Interior, down 9.2 per cent from the January 2015 total of 822 million. USGS estimates that recovery of aluminium and aluminium alloys totaled 653 million pounds, a decrease of 8.6 per cent year-over-year. Preliminary data indicate that recovery of aluminium from scrap totaled an estimated 8,244 million pounds in 2015, up 2.8 per cent over the 2014 total of 8,018 million. U.S. exports of scrap, not included in the government’s consumption statistics, totaled 215 million pounds in January, down 4.8 per cent from January 2015. Aluminium imports of ingot, scrap and mill products into...
Alba sales surge by 1.4% in Q1 2016
Despite the downside trend of all-in-aluminium prices, Aluminium Bahrain B.S.C. (Alba) was able to increase its overall sales. For the first quarter of 2016, sales figures reached 231,538 metric tonnes (mt), an increase of 3,231 (mt), as compared to 228,307 mt in Q1 2015 while production dropped to 235,478 mt against 237,774 mt for the same period in 2015. Further, Alba’s Value-Added Sales averaged 52 per cent of total shipments in the first quarter of 2016 versus 64 per cent for the same period in 2015. Commenting on Alba’s sales and production for Q1 2016, Alba’s Executive Officer, Tim Murray said: “We managed to step-up our sales performance despite tough market conditions weighing on the aluminium industry and thanks to focused-marketing strategy.”
