Primary aluminium weekly recap: EU plans not to include Russian aluminium in its 13th sanctions package; Egypt approves E£2.9 billion investment in metal industry
While recapitulating the week, the primary aluminium sector flashes some very important events and information. For instance, the European Union is now contemplating refraining from banning Russian aluminium imports in its next sanctions package; the Southland Chamber of Commerce is assisting Tiwai Aluminium Smelter with its potential closure at the end of 2024; three subsidiaries of Nanhai Aluminium bag the National High Tech Enterprises recognition and much more. This week, we also learned that primary aluminium production started in 2024 with an annual hike of 4.2%, as SMM predicted earlier this month. Let us explore every significant event that has made this week momentous.
According to a report, the European Union will most likely back off from prohibiting Russian aluminium imports in the 13th sanctions package. Despite full consent and support from local aluminium producers in Lithuania, Latvia, Estonia, and Poland, the European Union is contemplating taking this drastic step as many industrial nations are warning that the sanction might escalate aluminium prices and cause stringent availability of raw material for the domestic downstream sector.
The Southland Chamber of Commerce reported this week that it is assisting to prepare for the potential closure of the Tiwai Point Aluminium Smelter at the end of 2024. The chamber is working closely with the smelter to enable it to deal with any uncertainty if that defers the closure again. Upon the smelter's closure, about 750 direct jobs would be affected, along with 2,500 livelihoods in the region indirectly associated with the smelter.
Guiyang Institute and Changsha Nonferrous Metallurgy Design and Research Institute Co., LTD., both esteemed members of Chinalco International, recently inked a strategic cooperation agreement. Both institutes, sharing a common bond as Chinalco International members, pledged to implement the visionary directives from the 2024 Chinalco Group Congress and the Chinalco International Congress. The focus is on high-quality party building, leveraging their respective resource, platform, and technological advantages.
China-based Nanhai Aluminum Application Technology Group and three of its subsidiaries received a recognition as the 'National High Tech Enterprises' for 2023. , subsidiaries of Nanhai Aluminum Application Technology Group, namely Guangdong Nanaluminum Construction Formwork Technology Co., Ltd., Guangdong Dingsheng Technology Co., Ltd., and Foshan Yuexin Ban Digital Labor Service Co., Ltd., successfully attained the designation of "National High-tech Enterprise" following rigorous rounds of assessment.
Egypt approved substantial investments of nearly 2.9 billion Egyptian pounds ($94 million) in new metal industrial projects for the fiscal year 2023-2024. The initiative, spearheaded by the state-owned Metallurgical Industries Holding Company, aims to finance novel projects and augment production lines across affiliated entities. The Metallurgical Industries Holding Company has allocated approximately $1 billion to amplify Egyptalum's aluminium production by an impressive 300,000 tonnes annually. Egyptalum, the foremost aluminium producer in Egypt, stands at the forefront of this burgeoning development.
On Tuesday, February 6, the European Commission unveiled a comprehensive impact assessment outlining potential pathways to achieve the European Union's ambitious goal of becoming climate-neutral by 2050. Dubbed as 'Securing our future: Europe's 2040 climate target and path to climate neutrality by 2050 building a sustainable, just and prosperous society', this comprehensive plan outlines the necessary climate and energy policy framework post-2030, aiming for an ambitious greenhouse gas (GHG) emissions reduction target of 90 per cent by 2040, compared to 1990 levels.
According to the Shanghai Metals Market survey, China’s domestic primary aluminium production welcomed the year in January 2024 (31 days) with an annual growth of 4.2 per cent from 3.42 million tonnes to 3.562 million tonnes. But on a month-on-month basis, the output showed restraint, with the average daily production remaining at 114,900 tonnes. In January, the operating rate of domestic aluminium processing enterprises declined slightly, and so did the output of aluminium billets and other products in the northwest, southwest and other regions. The aluminium liquid ratio in the industry also fell to about 70.46 per cent, down by 3.7 percentage points M-o-M and 11.2 percentage points Y-o-Y.
The LME aluminium benchmark price trended up through the first four days of the week (from February 5 to 8) by 1.72 per cent from US$2,183.50 per tonne to US$2,221 per tonne, but plunged on the fifth day by 1.82 per cent, marking a week-on-week decline of 1.31 per cent.
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