Key highlights from the global aluminium industry, March 2024
The price of aluminium on the LME experienced a gradual upward trend throughout March 2024, fluctuating within a range of approximately USD$85-90. Similarly, the SHFE price also increased slightly, hovering around USD$65-70, albeit with considerable fluctuations. However, according to a research report by AL Circle titled "Global Aluminium Industry Outlook 2024," expectations were set at the beginning of the year. It projected a resemblance of the price trend in H1 2024 to that of 2023, with anticipation mounting for H2 2024. This anticipation stems from forecasts suggesting a surge in demand for aluminium during the latter half of the year, fuelled by potential economic recovery in global markets after a period of deceleration.
When the United States and China engage in economic tensions, the repercussions extend far beyond their borders. Together, they account for over 40 per cent of global production, making any disputes between them detrimental to the entire world economy. This scenario has persisted for five consecutive years.
Eswar Prasad, a Senior Professor of trade policy at Cornell University, says, "Having the world's two largest economies at loggerheads at such a fraught moment exacerbates the negative impact of various geopolitical shocks that have hit the world economy."
Here are the key highlights from the worldwide aluminium industry:
With a significant wind and solar tender, Tomago Aluminium, Australia's premier smelter, embarks on a riveting journey toward sustainability. As the nation's largest energy consumer, Tomago's transition to renewables sets a pioneering precedent in the aluminium industry. Tomago Aluminium, renowned for its efficiency, spearheads a monumental shift towards clean energy. With plans to transition to renewable sources by the decade's end, the smelter aims to secure a long-term, economically viable deal to power its operations sustainably.
Constellium unveiled its initiative to commence industrial trials for utilising hydrogen within its casthouses, marking a pivotal advancement in its dedication to reducing carbon emissions. Recycling and casting, among the most energy-intensive processes, collectively contribute to nearly half of Constellium's direct greenhouse gas emissions. Following the promising laboratory-scale trials carried out in 2022 by C-TEC, Constellium's primary R&D hub, the company successfully showcased that switching from natural gas to hydrogen doesn't compromise energy efficiency, oxidation rate, or product quality.
To know more: https://www.alcircle.com/news/constellium-embarks-on-hydrogen-trials-for-sustainable-casthouses-109177
Aluminium Corporation of China (Chalco) expressed concerns about the "relatively high" risks associated with bauxite supplies from Guinea, highlighting the nation's increasing reliance on a single source for this crucial raw material. Last year, Guinea accounted for 70 per cent of China's bauxite imports, essential for aluminium production. This heavy dependence left the company, formerly known as Chalco, significantly vulnerable to the unrest and uncertainties in Guinea.
In a groundbreaking development poised to transform the mining and shipping sectors in West Africa, Cosco Shipping Bulk Co., Ltd, CTC Mining (SL) Ltd, and Baometal Minerals International Trade Ltd have unveiled their collaboration on the ambitious CTC Port Loko Port Project. This trilateral pact represents a pivotal moment in advancing mineral resources and infrastructure in Sierra Leone and the wider region.
To know more: https://www.alcircle.com/news/sierra-leone-s-bauxite-sector-eyes-expansion-via-ctc-port-project-109070
Alcoa announced that it has entered into a binding Scheme Implementation Deed with Alumina Limited, under which Alcoa will acquire Alumina Limited in an all-scrip, or all-stock, transaction. The Agreement terms are consistent with the previously agreed and announced transaction process deed. Consistent with the Process Deed, the Alumina Limited Board of Directors has recommended that Alumina Limited shareholders vote in favour of the Agreement in the absence of a superior proposal and subject to an independent expert concluding (and continuing to conclude) that the transaction is in the best interests of Alumina Limited shareholders. The Independent Directors of Alumina Limited and its Managing Director and Chief Executive Officer intend to vote all shares of Alumina Limited held or controlled by them in favour of the agreement.
To know more: https://www.alcircle.com/press-release/alcoa-enters-into-binding-agreement-to-acquire-alumina-limited-109168
Century Aluminium announced it would get up to $500 million from the U.S. Department of Energy (DOE) Office of Clean Energy Demonstrations as part of the Industrial Demonstrations Program (IDP). Century's Green Aluminium Smelter Project will receive Bipartisan Infrastructure Law and Inflation Reduction Act funding, which is designed to demonstrate commercial-scale decarbonisation solutions to move energy-intensive industries towards net zero. Century Aluminium plans to utilise the amount for building the first new US primary aluminium smelter in 45 years, aiming at doubling the size of the current US primary aluminium industry and strengthening domestic economies and its position in the global market.
The global aluminium industry is cautious about the potential competition between the United States and European buyers for Middle Eastern aluminium if the European Union bans Russian metal, leading to price hikes to the 2018 level when sanctions were imposed on Rusal. As an impact of the possible aluminium price hikes due to the intense race for aluminium from the Middle Eastern countries, including the United Arab Emirates and Bahrain, product costs will inflate for Western companies from the transport, packaging, and construction industries, fuelling an additional challenge besides high energy costs.
The US Department of Commerce announced the implementation of preliminary countervailing duties on aluminium extrusion imports from China, Indonesia, Mexico, and Turkey, claiming to protect the business of domestic extrusion manufacturers. For each country, the Department of Commerce has levied different duties depending on the category of products they offer. For instance, the duty rate for China ranges between 15.41 per cent and 169.66 per cent, for Indonesia ranges between 6.69 per cent and 43.56 per cent, for Mexico between 1.68 per cent and 77.8 per cent, and for Turkey between 1.45 per cent and 147.53 per cent.
The Nautical SUNRISE initiative aims to support the world's largest Offshore Floating Solar (OFS) power project. With a budget of €8.4 million, predominantly funded by the Horizon Europe programme to the tune of €6.8 million, the project commenced in December 2023. Its primary objective is to research and develop OFS systems and their components, paving the way for widespread deployment and commercialisation, either as standalone units or integrated within offshore wind farms.
To know more: https://www.alcircle.com/news/nautical-sunrise-initiative-spearheads-offshore-floating-solar-power-advancements-109090
Emirates Global Aluminium (EGA), the world's leading producer of premium aluminium, officially sealed a significant deal on March 21, 2024. The aluminium giant from the GCC region has signed a binding agreement to acquire Leichtmetall, a renowned aluminium recycling company based in Germany. Leichtmetall is a European speciality foundry that produces hard alloys and larger-diameter billets containing significant proportions of secondary aluminium. EGA intends to acquire 100 per cent ownership of the company currently held by Leichtmetall Holding GmbH, a subsidiary under an investment fund managed by Quantum Capital Partners GmbH. Pending regulatory clearance, the acquisition is anticipated to be completed in the first half of 2024.
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