Press Metal Aluminium Holdings Berhad anticipates a continued easing of the tight alumina supply this year, driven by rising global production. Group CEO Tan Sri Koon Poh Keong expects new refinery capacity expansions in Indonesia, India, and China to significantly boost alumina output globally.
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“This increase in supply is driving down high alumina prices, alleviating pressure on aluminium production costs,” said Koon Poh Keong in the company’s financial year ended Dec 31, 2024 (FY24), annual report.
Koon noted that rising alumina prices in 2024—fuelled by temporary supply disruptions and heightened freight costs due to port congestion and geopolitical tensions—posed a major operational challenge for global aluminium producers. The average market price of alumina reached US$ 501 per tonne, accounting for around 21 per cent of the average aluminium price, up from 15 per cent in 2023.
Koon stated that while alumina prices started to decline toward the end of last year, risks persist—especially concerning bauxite sourcing, which remains vulnerable to policy shifts and supply disruptions. He added that Press Metal, South-East Asia’s largest integrated aluminium producer, has ramped up efforts to optimise its upstream alumina assets and strengthen vertical integration across its operations.
“The refinery is expected to come on stream in two years, with an annual production capacity of one to 1.2 million tonnes per annum, with the potential to increase this capacity in the future. Our upstream expansion will increase our alumina leverage substantially and boost our competitive edge across the aluminium value chain. It is an effective approach towards ensuring high self-sufficiency and a stable supply of our alumina needs, which are critical to our core smelting operations. This will also reduce our reliance on third-party suppliers and traders, ensuring greater operational resiliency and efficiency. With the close proximity of the refineries in Indonesia to our smelters in Sarawak, we anticipate cost savings that will further optimise our overall operations,” Koon added.
In September last year, Press Metal announced it had acquired an 80 per cent equity stake in PT KAN, a new alumina refinery project in Indonesia. To strengthen its upstream integration, Press Metal acquired a 25 per cent stake in Indonesian alumina producer PT Bintan Alumina Indonesia (PT BAI) for US$80.23 million in 2019. According to Koon, PT BAI currently has an annual production capacity of two million tonnes, with plans to double that within the next two years. The company, through its holding entity Nanshan Aluminium International Holdings Ltd, recently completed an initial public offering in Hong Kong to secure funding for its expansion.
Reflecting on the 2024 global aluminium market, Koon described it as highly volatile, driven by a complex mix of geopolitical tensions, evolving trade policies, and ongoing supply chain disruptions. Aluminium prices opened the year above US$2,100 per tonne, peaked at around US$2,700 in May, and later experienced a correction. By the end of 2024, prices had rebounded to over US$2,500 per tonne, supported by lower U.S. interest rates and continued supply constraints in both the aluminium and alumina markets. Koon noted that the U.S. administration’s recent announcement of a 25 per cent tariff on aluminium imports has triggered a market response, pushing higher aluminium prices and driving up the U.S. Midwest premium.
Image Source: Press Metal Aluminium Holdings
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